The Price Of Oil For The Kremlin Could Fall To $50 A Barrel

The EU is preparing to lower the price ceiling.

European Union countries are discussing the introduction of a new price ceiling on Russian oil. It will further reduce the cost of a barrel from the Russian Federation and increase economic pressure in the long term. This is reported by Bloomberg.

The issue is about adjusting the current ceiling of $60 per barrel and introducing a flexible revision mechanism based on market fluctuations.

Sources familiar with the talks say EU members are considering setting the price at 15% below the market price. That would mean the new limit could be around $50 a barrel.

In addition, there are plans to review the price every three months to keep the measure effective. While the current cap system has been criticized for being weakly enforced and difficult to control, it has nevertheless served as the basis for a number of Western sanctions against oil trade from Russia.

The lowering of the price threshold could pave the way for additional steps in that direction. However, not all countries in the bloc support the change in its current form.

Traditionally, the maritime states - Greece, Malta and Cyprus - have expressed doubts about the need for such an adjustment without direct support from the G7, including the US.

Nevertheless, according to the interlocutors, the stance of these countries has softened and they are willing to consider the proposals.

Washington's support also matters. Previously, US President Donald Trump refused to approve a lowering of the price ceiling, but his stance has become less categorical recently. Some EU countries are determined to move forward regardless of the US position.

The lowered price ceiling is part of the EU's 18th sanctions package. Its adoption has so far been held back by Slovakia, which is demanding concessions on giving up Russian gas. Brussels, in turn, is ready to provide Bratislava with certain guarantees in exchange for lifting the veto.

The topic was discussed on Friday at a meeting of EU permanent representatives. Although a final decision has not yet been made, the general direction of the negotiations is encouraging.

The new mechanism, if agreed, could seriously limit the Kremlin's ability to circumvent existing restrictions and finance the war against Ukraine with oil revenues.

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