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The EU wants to cap Russian oil around $65 a barrel, but Ukraine President Zelenskyy is pushing for it to be as low as $30

Markets Insider 28/11/2022 (Phil Rosen)
Ukrainian President Volodymyr Zelenskyy. Emin Sansar/Anadolu Agency via Getty Images © Emin Sansar/Anadolu Agency via Getty Images Ukrainian President Volodymyr Zelenskyy. Emin Sansar/Anadolu Agency via Getty Images
  • European governments are in talks for a price cap on Russian oil at around $65, but Ukraine's President Volodymyr Zelenskyy said that's too high.
  • The proposed limit is artificial, he said, and would like to see instead a price cap of $30 to $40 per barrel, per Reuters.
  • On Friday, Zelenskyy said a price cap of $70 a barrel is like a "concession" to Moscow. 

While European nations weigh a price cap on Russian oil at around $65 a barrel, Ukrainian President Volodymyr Zelenskyy is pushing for about half that level. 

"We would like the sanctions to be very effective in this fight, so that the limit is at the level of $30-$40, so Russia feels them," Zelenskyy said at a news conference on Saturday, according to Reuters. 

The December 5 deadline is inching closer, though European Union governments have yet to come to a consensus on what exactly the price cap will be. Talks stalled over the weekend, and the European Commission is now pushing a maximum level of $65, the Financial Times reported. 

The price cap will coincide the EU's December 5 embargo on seaborne Russian crude. The idea is to create a loophole in the EU ban that keeps supplies of Russian oil flowing on the global market while limiting export revenues for Moscow. 

"The limit that is being considered today — about $60 — I think this is an artificial limit," Zelenskyy said.

Earlier reports put the price cap as high as $70 per barrel. On Friday, Zelenskyy said a level that high would be a "concession" to Moscow, given that it's well above production costs.

Experts have said that because buyers in Asia like China and India have already been purchasing Russian crude at a steep discount, a price cap would allow those customers to bid even lower for barrels.

And according to Energy Aspects analyst Livia Gallarati, the nations that have agreed to adhere to the cap are the ones that already are on board with banning Russian oil imports, so it's unlikely to have any major impact.

"If [Russia] kept selling at the level at which they're selling today, then no countries actually need to officially sign up to the price cap because they're getting that discount anyway," she told Insider last week.

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