Germany urges partners to comply with price cap on Russian oil

By Al Mayadeen English
Source: Agencies
4 Dec 2022 23:08

German Foreign Minister says that Berlin wishes to see its partners join sanctions on Russia.

Big tanks are seen at a BP oil refinery in Gelsenkirchen, Germany, Monday, March 7, 2022. German antitrust officials said Wednesday they are closely watching oil market developments to determine whether the falling price for crude results in a similar drop at the pump.The Federal Cartel Office said its probe will encompass the crude market, oil refineries, wholesalers and gas station operators. (AP Photo/Martin Meissner, File)

German Foreign Minister Annalena Baerbock stated on Sunday that her country desires to see its global partners oblige by the price cap decision on Russian oil regardless of being officially a part of it.

Berlin's top diplomat made this statement ahead of her planned visit to India on December 5 where she will stay in the country's capital New Delhi for one day and meet with her Indian counterpart, Subrahmanyam Jaishankar, to discuss their country's relations and common issues and interests.

In response to a question about whether the foreign minister is going to address India's increasing imports of Russian oil after the price cap decision, Baerbock replied that Germany knows that "many states have different economic constraints," however she said she urges their partners to join the sanctions on Russia.

"[Price cap on Russian oil] aims to avoid supply shortages and rising prices for states depending on Russia's oil. Partners can support without formally adhering to it: by purchasing oil below the set cap," Baerbock said.

On Friday, the G7 nations and Australia issued a statement saying that had come to an agreement on the maximum price cap of Russian crude oil: $60 per barrel, a decision which will come into effect on December 5.

The price cap developed by the US-led international coalition will be implemented on February 5, 2023, and includes a price review mechanism that will keep the price cap at 5% below the market value.

As a result of the price cap decision, companies would be prohibited from providing shipping and insurance, brokering, and financial assistance, which facilitates the transportation of Russian oil unless it sells below the agreed threshold, which (in the case that Russia sells at price cap) would theoretically enable countries to profit on the difference between Russia's oil price and world market prices.