EU Reportedly Mulls Shipping Ban on Russian Oil Amid Price Cap

Last month, Russia’s Deputy Prime Minister Alexander Novak slammed the G7's decision to introduce a price cap on Russian oil as absurd, warning that Moscow would not deliver oil products to countries that support the decision.

The EU is considering adding shipping restrictions to its oil sanctions against Moscow as Brussels continues to discuss the introduction of a price cap on Russian oil, Bloomberg has quoted unnamed sources as saying.

The sources said that a shipping ban would prevent EU ships from transporting Russian oil sold above an agreed-upon threshold.

They added that the bloc would have to change its earlier anti-Russian sanctions to allow for shipping and services to continue within an agreed price cap, something that all 27 EU member states have yet to support.

According to the insiders, several details still need to be settled, including the price the allies would set for the cap. They said that “the previously adopted EU restrictions enter into force on December 5, but could affect physical oil trading well before then because of the time it takes to hire vessels and get cargoes to their destinations."

Peskov Warns Against Price Cap on Russian Oil

The claims follow Kremlin spokesman Dmitry Peskov telling reporters earlier this month that the G7 plans for a price cap on Russian oil “will substantially destabilize” oil markets.

He said that the West’s “anti-Russian measures had led to a very deep [energy] crisis” in Europe. Those measures have led to a situation where Europeans buy liquefied natural gas from the US for huge amount of money, Peskov said, adding that “American companies are getting richer, while European taxpayers are getting poorer.”

Peskov also said that Russian oil not delivered to Europe will be supplied to those countries that respect market conditions via alternative routes.

The Kremlin spokesman referred to a recent remark by Russian Deputy Prime Minister Alexander Novak that Moscow will not deliver oil or oil products to countries that support the idea of capping the price of Russian oil.

This came after the Russian Embassy in the US warned that the price cap on Russian oil “only threatens to further collapse the oil market, which is already struggling to recover after the COVID-19 pandemic.”

“Moreover, it is under relentless pressure from lobbyists promoting a turbocharged ‘green’ transition,” the embassy stated, stressing that Moscow “will not sell oil at a loss” and it is “not going to work under non-market conditions.”

During their summit in June, G7 members issued a communique noting that the oil price cap scheme could be implemented through options such as allowing Russian seaborne crude oil and petroleum products to be shipped worldwide, but only if they are purchased at or below an agreed-upon price threshold.

In March, US President Joe Biden announced a ban on Russian oil, natural gas and coal imports, and the UK followed suit, declaring a halt of imports of Russian oil and petroleum products starting in early 2023.

The European Union has said it will block most Russian oil imports by the end of 2022. The decisions were part of severe sanctions that were imposed on Russia by the US and its allies shortly after the beginning of Moscow’s special operation to demilitarize and de-Nazify Ukraine on February 24.