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The planned price cap on Russian oil is an anti-market measure that will have devastating effects on all and could significantly complicate the situation on the global markets, Maria Zakharova, spokeswoman for Russia’s Foreign Ministry, said on Wednesday.
“We have repeatedly said that the introduction of the so-called ceiling on Russian oil prices is not just a non-market mechanism, it is an anti-market measure,” Zakharova said at a briefing, reiterating that Russia would not supply oil to countries that will have joined the price cap mechanism.
The ongoing disagreements over the actual price cap within the EU show how “detached the initiative is from the economic reality,” Zakharova said.
“The creation of a certain cartel of buyers sets a very dangerous precedent in global trade,” the spokeswoman added.
The EU member states are still at odds over the price they and the G7 would set for a ceiling for Russia’s oil if Western companies are to continue providing maritime transportation services for Russian oil cargoes.
The price cap and the EU embargo on imports of Russian oil are set to enter into force in just a few days, on December 5.
Reports emerged last week that the EU was discussing capping the price of Russian oil at somewhere between $65 and $70 per barrel. Such a cap, if approved, would not effectively lower the price of the flagship Russian crude currently being traded on the market.
Talks continue, but there are differences among member states. One group of EU countries, including Russian neighbors Poland, Lithuania, and Estonia, believe the proposed price cap is too high and will still give Russia a handsome revenue from oil.
Another group of mostly southern EU members with large shipping industries – Greece, Malta, and Cyprus – have said a $65-$70 cap is too low and demand compensation for the potential loss of Russian oil trade to their shipping.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com