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Zelensky says price cap set for Russian oil is too high

President Volodymyr Zelensky of Ukraine has sharply criticized a plan brokered by the Group of 7 nations to impose a maximum price of $60 a barrel on Russian crude oil, arguing that the cap was not low enough to significantly curb the Kremlin’s war effort and suggesting that the plan the architects were “trying to avoid big decisions”.

Mr Zelensky made the comments in his evening speech on Saturday evening, just a day after European Union diplomats reached the agreement after lengthy negotiations.

The $60 a barrel threshold was a compromise: a group of European maritime nations had demanded that the price cap be set at $70 a barrel or above, to ensure that their commercial interests would not be disrupted; another group of pro-Ukrainian countries had demanded that the cap be set at or around $30 a barrel to drastically reduce Russia’s oil revenue. Eventually, the negotiators settled on a price that is in the vicinity of what major buyers of Russian oil, such as China and India, are currently paying.

The deal was heralded by its supporters as one that could both make a small dent in the Kremlin’s energy revenues and avert a global oil shock. But Mr. Zelensky found this insufficient.

“The logic is obvious: if the price limit for Russian oil is $60 instead of, for example, $30, which Poland and the Baltic countries have been talking about, then the Russian budget will receive around $100 billion a year. “, Mr. Zelensky said.

“This money will not only go to war and not only to Russia’s sponsorship of other terrorist regimes and organizations,” he continued. “This money will also be used to further destabilize precisely those countries that are now trying to avoid big decisions.”

Dmitry S. Peskov, spokesman for the Kremlin, said on Saturday that Moscow would not agree to capping Russian oil prices, according to the Russian news agency Tass.

The United States had led the campaign for an agreement along the lines of what had finally been negotiated. After the deal was announced, Treasury Secretary Janet L. Yellen welcomed the plan. This helped “achieve our goal of restricting Putin’s main source of income for his illegal war in Ukraine while simultaneously preserving the stability of global energy supplies,” she said, referring to the Russian leader, Vladimir V. Putin.

Western sanctions have so far failed to weaken Moscow’s energy exports: Russia is on track to earn more this year from oil sales than in 2021, supported by a surge in world prices after the start of the war.

And questions remain about whether the new plan can be implemented. It relies on every part of the Russian oil supply chain to attest to the price of shipments, and insurers and shippers have warned that records could be tampered with by those seeking to keep Russian oil in circulation.

In his remarks, Mr Zelensky lamented that “the price cap discussion” had “ended around the world” without any “big decision”.

“You wouldn’t call it a big decision to set such a cap for Russian prices,” he said of the $60 a barrel cap, adding that the cap would be “pretty comfortable for the budget of a terrorist state”.

“Russia has already caused enormous losses to all countries in the world by deliberately destabilizing the energy market,” he said.

EU diplomats agreed that the price cap should be reviewed every two months, or more frequently if necessary, by a committee of policymakers from the Group of 7 countries and allies.

nytimes Gt

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