Poland still against EC Russian crude oil price cap proposal

Poland will oppose a European Commission proposal to impose a price cap of USD 65 on a barrel of Russian oil as it believes that the proposed level is too high, according to a PAP source.

The aim of the price cap, which is planned to be imposed on December 5 and which has also been put forward by the G7, including the US, is designed to reduce Moscow's budget for funding its invasion of Ukraine.

The introduction of a cap, however, means that the EU will withdraw from the current ban on Russian oil, thereby softening some sanctions.

"If we decide to ease the current system of sanctions and make it possible for Russia to export crude oil, and, if we speak at the same time about cutting Russia's budget incomes, then the price cap must be below a market price," PAP was told by a diplomat.

According to the diplomat, Poland "wants the EU to introduce a clear mechanism that adjusts the price of Russian oil to market price fluctuations," and believes that the price cap should be accompanied by anther package of sanctions.

"We must send a clear signal to Russia, which has been continuing its aggression against Ukraine. There must be another package of sanctions which will make up for the decision to soften the current ones."

Another Polish diplomat in Brussels on Tuesday told PAP: "Working-level talks continue. We still believe that the price cap must be accompanied by a 9th package of EU sanctions on Russia.

"Poland has been waiting for such a proposal," the diplomat added.

A decision on both the price cap and sanctions requires unanimity of EU members. Poland, which believes that the USD 65 price cap is too high, is being supported by a group of EU members, including the Baltic States.

The price cap would also ban companies from providing shipping and services, such as insurance, brokerage and financial assistance, which are needed to transport Russian oil anywhere in the world unless the oil is sold below the agreed threshold.

The production cost of a Russian crude oil barrel amounts to around USD 20.