Page 13 - FSUOGM Week 04 2023

FSUOGM POLICY FSUOGM

Western leaders debate Russian

petroleum product caps

EU THE EU, the G7 and Australia are considering studied these markets very carefully and we
the introduction of two price caps for Russian believe that we’re going to come out with a set of
Western leaders petroleum products – one for more expen- caps that will achieve the same things that we’ve
are considering two sive products such as diesel and gasoline and achieved with crude so far,” she said.
separate caps for another for cheaper products like fuel oil, Polit- She noted that so far the Russian crude oil
cheaper and more ico reported this week, citing EU diplomats. price cap had been successful, depriving Russia
expensive Russian The parties imposed a cap on Russian crude of revenue while not resulting in producers with-
petroleum products. oil exports in early December of $60 per barrel, holding supply from the market.
preventing insurers and shipping companies in Meanwhile, several EU countries including
their jurisdictions from handling any cargoes Poland and Estonia are in support of Ukraine’s
globally sold above that price. The move was request to lower the Russian crude oil price cap
timed to coincide with the introduction of an at its two-month review, although there is no
EU ban on Russian seaborne oil exports. agreement within the G7 on adjusting the price
Regarding the proposed caps on refined at this stage. Estonian Foreign Minister Urmas
petroleum products, Western countries want to Reinsalu told Politico that he wanted to try to
structure them in a way that ensures continued persuade other countries to review the price cap,
flow of Russian diesel, US Treasury Secretary given that Russian oil prices have fallen since its
Janet Yellen said on January 21, adding that mar- introduction. Russia’s flagship Urals blend of oil
kets were complicated and that things might not was selling at a mere $37.8 per barrel at the Baltic
go to plan. Yellen confirmed that the plan was to Sea port of Primorsk in early January.
adopt two caps on different fuels. But fixing these “There is an issue where we hope to launch
new caps had proved “more complicated” than a political debate. But there is no secret that
for crude, given the range of different refined some countries appear to be more influenced
products and pricing structures. by their particular transport sectors,” Reinsalu
“It’s more complicated, but we’ve been work- said. “There was also a lot of fear by the [experts]
ing hard to figure out how to achieve the same before implementing this oil price [saying that
objectives” as with the cap on crude, she said. it would] cause a grand deficit, and the prices
“You know, there’s always the potential that would [see] a significant push up. We have to
things may not go according to plan but we’ve admit that it hasn’t happened." ™

Week 04 25•January•2023 www. NEWSBASE .com P13