A meeting of government representatives from the European Union, slated for Friday night to discuss a Group of Seven proposal to cap Russian seaborne oil prices, has been postponed, according to EU diplomats.
One diplomat complained that the points of view did not sufficiently align.
A second diplomat stated, “Neither tonight nor this weekend there will be a meeting.”
On Thursday, European Union governments disagreed on the appropriate level for a price cap on Russian oil in order to limit Moscow’s ability to finance its conflict in Ukraine without disrupting the world’s oil supply. The cap will go into effect on December 5.
The cap’s purpose is to prevent shipping, insurance, and re-insurance companies from transporting Russian crude around the world unless it is sold for less than the price decided upon by the Group of Seven and its allies.
The price cap would make it very difficult for Moscow to sell its oil, which is its largest export and accounts for around 10% of global supply, for a higher price because the major shipping and insurance companies in the world have their headquarters in G7 nations.
Greece, Cyprus, and Malta lobbied for a higher quota or some type of compensation for the anticipated loss of business to other countries, while Poland, Estonia, and Lithuania pushed for a far lower cap than the $65-70 per barrel recommended by the G7.
It was unclear how close both parties were to reaching a deal, according to the EU diplomats who declined to provide their names.
One of the diplomats involved in the negotiations said, “The latest is that Poland, Estonia, and Lithuania are trying to outdo each other on how strict they are on the price cap,” adding that Poland wants to tie agreement on the price cap to a fresh set of sanctions against Russia.
Malta, Greece, and Cyprus, meanwhile, are just interested in making money, no matter how they may do it—through a greater cap, compensation, etc. The U.S. is nowhere to be seen trying to bring the two sides together, so positions are still very far apart, the diplomat said.
