Oil price cap will destroy Russia’s economy

Ukraine yesterday welcomed a $60 price cap on Russian oil agreed by the EU, G7 and Australia, saying it would "destroy" Russia's economy.

The price cap, previously negotiated on a political level between the G7 group of wealthy democracies and the European Union, will come into effect with an EU embargo on Russian crude oil from Monday.

Poland had refused to back the price cap plan over concerns the ceiling was too high, before its ambassador to the EU confirmed Warsaw's agreement on Friday evening.

The embargo will prevent shipments of Russian crude by tanker vessel to the EU, which account for two thirds of imports, potentially depriving Russia's war chest of billions of euros.

"We always achieve our goal and Russia's economy will be destroyed, and it will pay and be responsible for all its crimes," Ukraine's presidential chief of staff Andriy Yermak said on Saturday on Telegram.

But a cap of "$30 would have destroyed it more quickly", he added.

The G7 said it was delivering on its vow "to prevent Russia from profiting from its war of aggression against Ukraine, to support stability in global energy markets and to minimise negative economic spillovers of Russia's war of aggression".

The White House described the deal as "welcome news", saying a price cap will help limit Russian President Vladimir Putin's ability to fund the Kremlin's "war machine".

However, the Kremlin yuesterday said Russia "will not accept" the  price cap.

TASS quoted Kremlin spokesman Dmitry Peskov as saying Moscow had prepared for the price cap and was analysing it.

After suffering humiliating defeats during what has become the largest armed conflict in Europe since World War II, Russia began targeting Ukrainian energy infrastructure in October, causing sweeping blackouts.

The Kremlin also indicated Moscow was in no mood for talks over Ukraine, after US President Joe Biden said he would be willing to sit down with Putin if the Russian leader truly wanted to end the fighting.

The White House, meanwhile, sought to pour water on the idea of talks as well on Friday, saying Biden currently has "no intention" of sitting down with Putin.