‘Only Language Russia Understands’ – EU May Cut Top Russian Oil Price

The European Commission (EC) on Tuesday proposed slashing the price cap on Russia’s global oil exports from $60 to $45 per barrel to add pressure on a Kremlin leadership that has been delaying meaningful peace talks with Ukraine.

“We are ramping up pressure on Russia, because strength is the only language that Russia will understand,” EC President Ursula von der Leyen said.

“Our message is very clear, this war must end. We need a real ceasefire, and Russia has to come to the negotiating table with a serious proposal,” she said.

On Tuesday, the price of West Texas Intermediate (WTI) crude, a common benchmark for oil’s spot price on the open market, hovered around $65 per barrel, as did a similar benchmark, Brent crude, named after a European oilfield in the North Sea.

The proposed 25 percent squeeze on Moscow’s revenues comes as the G7 nations plan to meet in Kananaskis, Alberta, next week (incidentally, the largest oil-producing province in Canada: Think Edmonton Oilers hockey team.)

While the G7 includes two of the world’s top-ten oil oil producers (the US at No. 1 and Canada at No. 4), Moscow’s competing BRICS coalition holds five of them (Russia at No. 3, China at No. 5, Iran at No. 7, the UAE at No 8 and Brazil at No. 9).

None of those countries formally has agreed to adhere to Western sanctions on Russia. India, in fact, which along with China are the top two global consumers of crude, relies on Russia as its number-one oil supplier. The vast majority of countries around the world do not adhere to Western sanctions on Russia.

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Russia has already begun importing gasoline from India and secured additional supplies from Kazakhstan after Ukrainian attacks disrupted its refining sector.

And while EU nations, of course, do respect those sanctions, the Guardian reported in February that, according to international think tanks, the EU is spending more money on Russian energy than on financial aid to Ukraine.

“EU member states bought €21.9B [$25B]of Russian oil and gas in the third year of the war, according to estimates from the Centre for Research on Energy and Clean Air, despite the efforts under way to kick the continent’s addiction to the fuels that fund Vladimir Putin’s war chest.

“The amount is one-sixth greater than the €18.7B [$21.4B] the EU allocated to Ukraine in financial aid in 2024, according to a tracker from the Kiel Institute for the World Economy,” the Guardian wrote.

AFP reported that, as part of its 18th round of sanctions since the full-scale invasion, the EU also proposed measures to stop the defunct Baltic Sea gas pipelines Nord Stream 1 and 2 from being brought back online.

Officials said they would also look to target some 70 more vessels in the “shadow fleet” of ageing tankers used by Russia to circumvent oil export curbs. This oil often makes its way to India and China, nonetheless.

The current crude price cap of $60 was set by the G7 in 2022, designed to limit the price Moscow can sell oil around the world by banning shipping firms and insurance companies dealing with Russia to export above that amount. 

European allies thus far have been frustrated by the US administration of President Donald Trump who, even after his anger at Russian autocrat Vladimir Putin for continuing brutal air assaults on Ukrainian civilians, has refused  to impose sanctions on Russia.

“My assumption is that we do that together as G7,” von der Leyen said. “We have started that as G7, it was successful as a measure from the G7, and I want to continue this measure as G7.”