Europe Can Bypass Trump to Hit Putin's Oil Empire: Kallas
The comments by EU High Representative Kaja Kallas followed Brussels' latest sanctions package that included proposing to lower a G7-imposed price cap on seaborne Russian oil from $60 to $45, to curb funding for Vladimir Putin's military machine.
Putin's spokesman Dmitry Peskov said lowering this price cap would not help stabilize global energy markets. Newsweek has contacted the White House for comment.
To cut export revenues for Moscow, the European Commission on Tuesday proposed to lower the G7-imposed price cap on Russian seaborne crude oil from $60 a barrel to $45.
This was among the EU's latest sanctions proposals to force Putin to the negotiating table to end the war he started in Ukraine, a package that needs the backing of all 27 bloc members.
EU Commission president Ursula von der Leyen said changing the cap would be discussed when the G7 meets in Alberta, Canada next week but Kallas' comments suggest the EU could proceed with the measure, regardless of the U.S.
On Tuesday, the EU Commission announced its 18th package of sanctions on Russia to force it to the negotiating table and curb Putin's war machine.
Kallas said the package would sanction firms linked to the Nord Stream gas pipelines between Russia and Germany that have been nonoperational since 2022 following suspected sabotage attacks. The package also targets Russian businesses and banking.
The EU Commission suggested any change to the oil price cap would require the backing of the G7 members as the EU also seeks to clamp down on Russia's sanctions-busting "shadow fleet" of vessels transporting the product.
However, Kallas told the Brussels Forum on Wednesday that most Russian oil goes via the Baltic and Black Seas. This meant that while U.S. backing was important, if it was not forthcoming, "we can still do it and have an impact."
Russia's "shadow fleet" of often older vessels with less reliable insurance, has made the $60 price cap difficult to enforce.
The cap also came into force in February 2023 when oil prices were much higher, which Kallas referred to when she said the agreement was intended to be 5 percent below the market price.
Kimberly Donovan from the Atlantic Council's Geoeconomics Center, said reducing the price cap to $45 is an acknowledgment that oil prices have dropped considerably and reflects a commitment to restrict Russia's ability to generate revenue.
Ivan Hortal Sanchez, European Union Campaigner at Razom We Stand, a Ukrainian campaign group, told Newsweek that the EU, ideally in full alignment with the U.S. and G7, must strictly enforce the price cap and closely coordinate to sanction more vessels.
He also said there should be further listings of Russian shadow fleet tankers adding that without massive oil revenues, the Kremlin will not be able to sustain its aggression against Ukraine.
EU High Representative Kaja Kallas on lowering the price cap on Russian oil: "The oil going through the channels, it's mostly Europe, it's via the Baltic Sea, it's via the Black Sea. So even if the Americans are not on board, we can still do it."
Kremlin spokesman Dmitry Peskov: "Such actions do not contribute to the stabilization of international energy markets and the oil market."
Ivan Hortal Sanchez, European Union Campaigner at Razom We Stand: "The EU, ideally in full alignment with the USA and G7, must strictly enforce the price cap and closely coordinate to sanction more vessels."
Kimberly Donovan, director of the Economic Statecraft Initiative Atlantic Council's Geoeconomics Center: "Russia still relies on revenue from oil exports, so lowering the price cap could negatively affect how much money they can bring in."
"Of course, it is important the United States... is together with us, and we have been operating together for quite some time," she said, "but it is also equally important for us what we do alone, because we alone are also a player."
The G7 summit will take place in Alberta, Canada from Sunday where the oil price cap and other aspects of the war in Ukraine will be discussed.
Meanwhile, Brussels seems optimistic that its eighteenth sanctions package will pass although it requires the backing of all 27 EU members, and the leaders of Slovakia and Hungary have suggested they would block any further measures against Russia.
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