HomeNewsRussia warns towards capping oil and fuel costs

Russia warns towards capping oil and fuel costs



European Fee President Ursula von der Leyen says the area is dealing with a rare scenario.

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European Union vitality ministers on Friday gathered in Brussels for emergency talks on the right way to shield households and companies from runaway fuel and electrical energy costs forward of winter.

European Fee President Ursula von der Leyen sought to put the groundwork for Friday’s assembly with a five-point plan. This features a worth cap on Russian fuel, a windfall tax on fossil gasoline earnings, a compulsory goal for lowering electrical energy use and emergency credit score strains for energy corporations.

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Russian President Vladimir Putin responded to the proposals by threatening to tear up present provide contracts if a cap on Russian vitality exports is imposed, warning that he was ready to let Europe “freeze” in the course of the colder months.

Russian International Ministry spokeswoman Maria Zakharova on Friday reportedly warned that the West failed to grasp how vitality worth caps might influence their very own nations. “The collective West doesn’t perceive: the introduction of a cap on costs for Russian vitality sources will result in a slippery flooring below its personal toes,” Zakharova mentioned, in response to Reuters.

It isn’t anticipated that EU member states will attain a call on Friday concerning the proposed coverage concepts.

EU lawmakers have repeatedly accused Russia of weaponizing vitality exports to drive up commodity costs and sow uncertainty throughout the bloc. Moscow denies utilizing vitality as a weapon.

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The 27-nation bloc has endured a pointy drop in fuel exports from Russia, historically its largest vitality provider, amid the standoff over the Kremlin’s onslaught in Ukraine.

Imported Russian fuel to Europe at present stands at 9%, representing a considerable fall from roughly 40% earlier than the battle.

The bitter vitality dispute between Brussels and Moscow has lately seen Russia fully halt fuel flows by way of a serious provide path to Europe, exacerbating the danger of recession and a winter scarcity.

Talking in Brussels forward of the talks, EU Vitality Commissioner Kadri Simson advised reporters that Friday’s assembly was mandatory to supply governments with the best instruments to deal with the deepening vitality disaster.

“This isn’t solely about costs,” Simson mentioned. “It’s also a problem on the facet of the safety of provide.”

Vitality payments have skyrocketed since Russia invaded Ukraine in late February and the West responded with a barrage of punitive financial measures.

Renewables wanted ‘sooner than ever’

“We face a rare scenario, not solely as a result of Russia is an unreliable provider, as we’ve got witnessed over the past days, weeks, months, but additionally as a result of Russia is actively manipulating the fuel market,” von der Leyen mentioned in a press release on Wednesday.

“I’m deeply satisfied that with our unity, our dedication, our solidarity, we’ll prevail,” she added.

EU lawmakers have repeatedly accused Russia of weaponizing vitality exports to drive up commodity costs and sow uncertainty throughout the bloc. Moscow denies utilizing vitality as a weapon.

Final week, Russia’s state-owned vitality big Gazprom cited an oil leak for the indefinite shutdown of the Nord Stream 1 fuel pipeline, which connects Russia to Germany by way of the Baltic Sea.

Nevertheless, the Kremlin has since mentioned that the resumption of fuel provides to Europe is totally depending on the EU lifting its financial sanctions towards Moscow.

“I feel what this vitality disaster has proven is that we’d like renewables and the inexperienced vitality transition sooner than ever,” Deepa Venkateswaran, senior analyst of European Utilities at Bernstein, advised CNBC’s “Squawk Field Europe” on Friday.

“At this level, renewables have by no means ever been [this much] cheaper than wholesale costs, that are pushed by fuel and fossil gasoline costs,” she added.

Oil worth cap

Talking alongside French Finance Minister Bruno Le Maire forward of a separate assembly of EU finance ministers within the Czech Republic, German Finance Minister Christian Lindner known as for solidarity throughout the bloc within the seek for options to assist households and companies.

“It’s a sign that France and Germany begins this assembly collectively, it’s a sign that we’re standing shoulder to shoulder not solely right here however policy-wise as nicely,” Linder mentioned, jovially nudging France’s Le Maire.

Linder mentioned he would invite all EU member states to assist the concept of a worth cap on Russian oil.

The G-7 financial powers issued a joint assertion final week backing the initiative, though vitality analysts stay extremely skeptical concerning the integrity of the proposal.

The Kremlin has warned it will cease promoting oil to nations that impose worth caps on Russian vitality exports.

“We need to keep away from greater revenues for Russia and we need to keep the value degree for our economies and one favorable means is the oil worth cap. It’s more practical when extra member states of the European Union assist this concept,” Lindner mentioned.



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