The Russian economy “has all the necessary capabilities” to finance the military offensive. This was stated to the press by the Kremlin spokesman, Dmitry Peskov, after the entry into force on Monday of the cap on the price of Russian oil by Western countries. “Such measures will have no impact,” he added, referring to this measure taken by the European Union, the G7 countries and Australia to hit Moscow in the wallet.
The European Union, the G7 countries and Australia have agreed to limit the price of Russian oil, a measure that will take effect from Monday.
Choking part of Moscow’s income
The stated aim of this new sanction is to dry up some of the colossal revenue Moscow earns from the sale of its hydrocarbons and thus reduce its ability to finance the war effort in Ukraine.
The mechanism adopted provides that it will only be possible to continue delivering Russian oil sold at a price equal to or less than 60 dollars a barrel. Beyond that, it will be prohibited for companies based in EU countries, the G7 and Australia to provide services that allow maritime transport (trade, freight, insurance, shipowners, etc.).
In fact, the G7 countries provide insurance services for 90% of global cargo and the EU is a major player in shipping; hence its ability to move this cap on oil delivered to most of Russia around the world, a credible deterrent. .
Countries that have adopted the mechanism will no longer receive
The activation of a limit coincides with the entry into force on Monday of an EU embargo on Russian oil transported by sea.
The Kremlin has already warned that it will no longer deliver oil to countries that adopt the capping mechanism, a position reaffirmed this Sunday by the Russian Deputy Prime Minister in charge of Energy, Alexander Novak. Quoted by Russian news agencies, he even claimed that Russia was working “on mechanisms to prohibit the use of the capping tool, regardless of the level set.”
The price of a barrel of Ural crude is currently hovering around $65, just above the $60 ceiling.
Source: BFM TV
