Moscow has vowed to reply to the West after it floated slapping a price cap on Russian oil, sparking fears that Russian President Vladimir Putin will slash more exports to Europe and send prices soaring further. Amid the war in Ukraine, Europe has been scrambling to wean itself off Russian fossil fuels in a bid to slash the Kremlin’s revenue and hamstring its war efforts. However the EU still relies on Russian gas, while several landlocked countries inside the bloc are still in need of huge volumes of Russian oil sent via pipelines.
Russia’s stranglehold on European energy supplies has already proved to be an issue globally, together with his invasion of Ukraine triggering supply chain constraints, and together together with his gas cuts to Europe, the Russian President has energy prices soaring, triggering a world crisis.
Now, the West is looking for to chop off extra cash from Putin by implementing a price cap on his oil exports. This has sparked fury in Moscow, which has dubbed the measure a “dangerous” move that it is determining tips on how to reply to.
Russian state news agency TASS reported on that Kremlin spokesman Dmitry Peskov said Moscow had already prepared Friday’s price cap announcement by the G-7, the EU and Australia.
On Saturday, the Kremlin said a price cap was the “fallacious move”. Mr Peskov was quoted by RIA saying that “we is not going to accept this cover” and he warned that Moscow would complete a rapid evaluation of the agreement before figuring out tips on how to respond.
Mikhail Ulyanov, Moscow’s ambassador to international organisations in Vienna, said Europe can ignore receiving anymore oil from Russia, despite EU sanctions exempting probably the most reliant EU nations like Slovakia, Hungary and the Czech Republic from the bloc’s Russian oil ban.
Mr Ulyanov tweeted: “Ranging from this 12 months Europe will live without Russian oil. Moscow has already made it clear that it is going to NOT supply oil to those countries who support anti-market price cap. Very soon the EU will blame Russia for using oil as a weapon.”
The proposed G7 price cap is about to let non-EU countries to maintain on importing seaborne Russian crude oil. Howeer, it is going to ban shipping, insurance and re-insurance firms from handling cargoes of Russian crude globally, unless it’s sold for under $60 (£48).
There are fears that this might complicate the shipment of Russian crude that’s dearer than the determined cap, and possibly to countries that aren’t a part of the agreement.
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Russia’s embassy within the US has said the cap is a “dangerous” move by the West and won’t stop Moscow from finding buyers for its oil.
In comments published on Telegram, the embassy wrote: “Steps like these will inevitably lead to increasing uncertainty and imposing higher costs for raw materials’ consumers.
“Whatever the current flirtations with the harmful and illegitimate instrument, we’re confident that Russian oil will proceed to be in demand.”
Nevertheless, the EU has already been coping with far fewer Russian oil supplies amid the invasion of Ukraine. Before the war, in 2021, greater than half of Russia’s oil exports were sent to Europe, in response to the International Energy Association. Within the bloc, Germany was the principal importer, with the Netherlands second and Poland third.
But following the February 2022 invasion, the EU has been scrambling to slash its dependence and has even included a Russian oil embargo in one in all its sanction packages. The US has also stopped purchasing Russian crude, while the UK also has plans to phase out the energy source.
US Treasury Secretary Janet Yellen has argued that a fresh price cap on would also put an extra strain on Putin’s funds and “limit the revenues he’s using to fund his brutal invasion”. She also claimed it could avoid disrupting global supplies, despite Russia’s threat to forestall oil any remaining oil from travelling into Europe.
She said in an announcement: “With Russia’s economy already contracting and its budget increasingly stretched thin, the worth cap will immediately cut into Putin’s most vital income.”
And despite Moscow’s fury at the worth cap, Ukrainian President Volodymyr Zelensky still thinks the West can do more to punish Putin, calling the measure “weak” and “not serious”.