February 03
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EU countries have resumed talks on introducing a price ceiling on Russian oil, with deep disagreements between them over at what level to set it at in order to hurt Russia as much as possible and cause minimal damage to member states, Politico reports.

The EU is under increasing pressure from the G7 and the United States. The measure is expected to go into effect on Dec. 5, at the same time as the EU ban on offshore imports of Russian crude oil and a similar UK ban on Russian oil.

The announcement was expected last week, but EU countries are still at odds over the exact level at which the limit should be set. According to several EU diplomats, Poland and the Baltic states are pushing for a tighter and lower cap, while Greece, Malta and Cyprus are pushing for either a higher price or compensation to protect their shipping industry.

The European Commission has proposed a ceiling of $65 to $70 a barrel. However, this is roughly the level at which Russian Urals crude currently trades. Brent crude, the international benchmark, sells for about $81 a barrel, while Russian crude trades at $66.

Poland said the price cap should be as low as possible, and Ukrainian President Volodymyr Zelenskiy said Saturday that a price in the $60 range would be an artificial limit.

The EU diplomat said informal discussions continue among countries about the level of the cap, with ambassadors meeting Monday to agree on a price if there is a breakthrough.

But the diplomat pointed out that hawkish countries would strongly oppose any cap they deem too high.

On the other hand, the trio of Mediterranean countries insist on what one senior diplomat called their vital interests. Under the plan, the G7 countries and the EU pledge to prohibit their insurance and shipping sectors from facilitating the transportation of Russian oil to third countries unless it is sold at or below the cap.

In a sign of frustration among G7 allies over the EU's delay, a senior diplomat from a Mediterranean country said they see pressure from the U.S. for the EU to agree on an oil price.

U.S. Treasury Secretary Janet Yellen has proposed a ceiling of $60 a barrel.

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