The price ceiling on the nation’s oil reserves was rejected by the Russian government which is set by Ukraine’s Western supporters. They have threatened to stop supplying oil to the nations that have endorsed it.
Australia, Britain, Canada, Japan, the United Nations, and the other twenty-seven nations of the European Union have decided to cap what they would pay for Russian oil. Russian oil was previously priced at sixty USD per barrel.
The changes will be in effect since Monday along with the sanctions established by the European Union on the Russian oil shipped by sea.
Dmitry Peskov, the spokesperson of the Kremlin has mentioned that Russia has to monitor the situation before deciding on a specific response, but it would not accept the price hike.
Representative permanent of Russia in Vienna at international organizations has mentioned that the European unions backing Ukraine would impact their decision.
Ulyanov has Tweeted stating that from this year, Europe will live without Russian oil. Moscow has already made it evident that it will not supply oil to those nations that would provide anti-market price caps. The EU will also accuse Russia of using oil as a weapon against Ukraine very soon.
The office of The Ukrainian President has previously stated that they would conduct a meeting on Saturday announcing a lower price cap saying that the one imposed by the European Union and the other seven nations did not go far.
The head of Zelensky’s office has mentioned that the price caps on oil should be lowered to 40 USD per barrel to completely destroy the enemy’s economy. He has criticized the Russian President’s action in Ukraine.
What does the price cap imposed on Russian oils imply?
The Friday agreements allowed the insurance companies and other firms to ship oil, and they would be able to deal with the Russian crude if the price of the oil is at the cap or lower. Most insurers belong to the European Union and other Western countries, which are required to observe the hikes.
The Russian embassy in Washington has declared that the demand for Russian oil will endure and has criticized the price caps as reshaping the basic principles in the market. The embassy has even declared that the per-cap barrel price would lead to an increase in uncertainty and higher prices for raw material consumers.
The price cap was imposed to put economic pressure on Russia to weaken its economy and further collapse its ability to finance a war that has killed several civilians and fighters, thrown the people of Ukraine from their homes, and put undue pressure on the world economy for a longer span.
The military’s general staff of Ukraine announced on Friday that The Russian army has fired five fire missiles, struck twenty-seven airstrikes, and struck 44 shelling attacks against Ukraine’s military and infrastructure of civilians.
The deputy head of The president’s office has mentioned that the attacks have killed one civilian and injured four people in the Donetsk region of Ukraine.
The U.K Defense Ministry has mentioned that the Russian forces have continued to invest a large portion of their total military effort and firepower in the small city of Bakhmut, which they have spent many weeks to capture.
The same incident has taken place in Southern Ukraine’s Kherson province whose capital city was freed by the Ukrainian forces after three weeks after the attack of the Russian forces.
Kherson is among the four regions that Putin annexed in September and promised to take as Russian territory. The recent weeks saw the continuous shelling of the Russian troops against Kherson city. This has affected a large number of city’s resident lives. They had to live without power for many days, and running water became unavailable in many parts of the city.
Ukrainian authorities have even reported intense fights in Luhansk and Russian shelling of the northeastern region of Ukraine. However, the regions were withdrawn from Russian soldiers in September.
The price cap will enable the flow of discounted Russian oil in the global markets and enable the markets and businesses to operate without any disruptions.
The EU sanctions proposed in the earlier part of this year had initially shocked people in the market for being rigid.
The idea was to ban the companies from providing insurance to Russian oil anywhere in the world. It will mean that the Chinese and the Indians would have to find their insurance by December 5.
edited and proofread by nikita sharma