The European Union (EU) has temporarily agreed to fix the price of Russian oil at $60 per barrel. Western sanctions aim to rebalance the global oil market to prevent price rises and Russia’s President Vladimir Putin to deprive the US of funds so that it cannot be used for the war in Ukraine. In such a situation, this step of EU is very important. The ambassadors have just reached an agreement on fixing the price for Russian marine oil, the EU president said in a statement.
The decision has yet to be officially approved with a written process, but is not expected to be delayed. They were required to fix a concessional price, which other countries would pay by Monday. The European Union's ban on Russian oil shipped by sea comes into effect on Monday, and a ban on insurance for this supply also takes effect from then. The purpose of fixing the price is to prevent a sudden reduction in the world supply of Russian oil, as this could lead to a new surge in the prices of energy sources and fuel prices.
'Cap on oil will significantly reduce Russia's revenue'
European Commission President Ursula von der Leyen said the price cap would significantly reduce Russia's revenue. "This will help us stabilize global energy prices, which will benefit emerging economies around the world," von der Leyen said on Twitter.
The G7 price cap would allow non-EU countries to continue importing seaborne Russian crude, but it would ban shipping, insurance and re-insurance companies from handling Russian crude cargoes around the world, unless It is not sold below the price range. Since the most important shipping and insurance companies are located in the G7 countries, the price cap would make it very difficult for Moscow to sell its oil at higher prices.
Russia's economy is already shrinking - America
US Treasury Secretary Janet Yellen said the cap would particularly benefit low- and middle-income countries, which have borne the brunt of higher energy and food prices. "With Russia's economy already shrinking and its budget increasingly vulnerable, the price cap will immediately cut into Putin's biggest source of revenue," Yellen said in a statement.
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