EU to propose lowering price cap on Russian oil in new sanctions package
The EU executive is to propose lowering the price cap on Russian oil as it seeks to tighten energy and financial sanctions targeting the Kremlin's ability to wage war.
The president of the European Commission, Ursula von der Leyen is expected to put forward a plan on Tuesday to reduce the price at which Russian oil can be sold from $60 (£44)a barrel to $45, according to an internal document.
The $60 price cap was agreed through the G7 in December 2022 with the aim of reducing Russia's revenues from fossil fuels. G7 leaders are due to meet next week in Canada.
The commission will also propose tightening up measures against the 'shadow fleet', hundreds of old and poorly maintained tankers that enable Russia to export oil to countries such as India at a price above the western-imposed cap.
For the first time EU sanctions are targeted against the captain of a shadow fleet tanker, an Indian national. Officials hope this will have a chilling effect, discouraging others from crewing these vessels that fly under a flag of convenience.
The commission also proposes listing 70 more shadow fleet vessels on its sanctions list, bringing the total under designation to more than 400. One EU diplomat estimated last month that the fleet now stood at about 800 tankers, up from just 100 two years ago.
The measures trailed by von der Leyen also include restrictions on doing business with the companies running the Nord Stream 1 and Nord Stream 2 pipelines. Nord Stream 1 was rendered unusable after a series of underwater blasts for which no one has ever claimed responsibility; Nord Stream 2 never received a licence. But Russia has expressed interest in reviving the gas projects connecting Russia and Germany. EU officials say they wish to dissuade investors from getting involved.
The latest proposals, which would have to be agreed unanimously by the EU's 27 member states, would also impose restrictions on doing business with 22 banks, cutting them off from the Swift financial messaging system.
The commission last week promised 'hard-biting' measures in its 18th round of restrictive measures against Russia, after von der Leyen met the US senator Lindsey Graham. The Republican senator is the author of what he says is a bill that would impose 'bone-breaking sanctions' on Vladimir Putin including a 500% tariff on goods from countries importing Russian oil.
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In its account of the meeting last week, the commission said: 'We need a real ceasefire, we need Russia at the negotiating table, and we need to end this war. Pressure works, as the Kremlin understands nothing else.'
European leaders last month vowed to impose 'massive' sanctions on Russia if Putin did not agree to a 30-day ceasefire within days.
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