Foreign minister calls for halving of US$60 Russian oil price cap

Foreign Minister Urmas Reinsalu (Isamaa).
Foreign Minister Urmas Reinsalu (Isamaa). Source: ERR

The European Union should cut in half the current US$60 per-barrel price cap on Russian crude oil, as soon as this month, in order to squeeze further Moscow's ability to sustain financially its war in Ukraine, outgoing Estonian Foreign Minister Urmas Reinsalu (Isamaa) says, as reported by Bloomberg.

"We have to put the Russian crude oil price cap so that it will not allow the Russia state to receive extra benefit," Reinsalu told Bloomberg last week.

Cutting the cap by half would "be the proper direction," he said, adding that "of course, it is a consensus issue but we won't give up in our appeal.

This would also form part of a wider process of cracking down on sanctions loophole exploitation, which in some cases has enabled the Russian Federation still to get microchips used in heavy weaponry, for instance, via non-EU nations such as Turkey and Kazakhstan.

Friendly countries should be pressured into keeping away from facilitating this, he added, while sanctions should continue to hit further the Russian banking system and nuclear power sector.

To date, the EU has set a principle of keeping the oil price cap at 5 percent below average market prices, though this will also see input from the G7 nations, meeting later this month, Bloomberg reports, adding a cutting in half of the current level is unlikely at this stage.

The cap should be extended to natural gas also, Reinsalu said, while Estonia has been talking about creating the legal framework which would allow frozen Russian assets to be utilized in order to aid Ukraine in its post-war reconstruction.

Reinsalu put the figure of currently frozen Russian assets in Estonia at around €20 million, Bloomberg reports.

The original Bloomberg piece is here.

Reinsalu's party, Isamaa, is not involved in coalition negotiations aimed at setting up the next administration, and following the March 5 Riigikogu election.


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Editor: Andrew Whyte

Source: Bloomberg

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