US tries to break EU deadlock over Russian oil price cap – POLITICO

US officials have intervened to try to persuade Poland and other EU countries to agree on a plan to hit Vladimir Putin’s war fund by capping the price paid for Russian oil.

As time is running out before Monday’s deadline for implementing the G7 price cap plan, Poland, Estonia and Lithuania have been pushing within the EU for a tougher limit, to a lower price, European diplomats said.

Disagreement between EU countries has delayed progress on the measure, which aims to cut the revenue Putin earns from overseas oil sales. The European Commission this week proposed a cap of up to $62 a barrel of Russian crude, down from its initial suggestion of a cap of between $65 and $70.

The trio of hawkish Eastern European countries say that with Russian Urals crude currently trading around the level of the proposed cap, the measure would not lower Moscow’s oil revenues, which help finance its war in Ukraine.

EU ambassadors will meet again on Wednesday for a pre-scheduled discussion, but it is not yet clear whether the oil price cap will be on the official agenda, although informal talks are continuing, said diplomats.

A potential price cap level review mechanism emerged as an important part of the talks, a senior EU diplomat said.

The EU’s ban on Russian oil transported by sea comes into force on Monday, December 5, a date which had been scheduled to coincide with the introduction of the price cap, originally designed by the G7.

Greece, Malta and Cyprus were either waiting for a higher price cap or compensation for their maritime industries, which play a key role in transporting oil via tankers around the world. But their objections have now been « swept away », an EU diplomat said.

EU diplomats said Washington was involved in seeking an agreement with Warsaw through direct contacts, alongside the EU. « It always takes a little longer for the Poles, » said a second diplomat.

US Treasury Secretary Janet Yellen also spoke last week with Estonian Prime Minister Kaja Kallas on the issue, Estonian public broadcaster ERR reported.

Although the G7 countries are still determined to confirm the cap level before Monday, a third EU diplomat insisted that the US contact with EU countries had been an « exchange of views and facts », and not an attempt to lobby to specifically agree on the level of the ceiling.

“Washington has reached out to capitals, listened to arguments and explained,” the diplomat said. The warmongering countries, plus Latvia, have also secured a promise from the European Commission that talks on the next sanctions package against Moscow will begin as early as this weekend, three senior diplomats said.

The Commission is about to start consultations with EU envoys on the ninth package of sanctions against Russia, the diplomats said.

It is still unclear what will be in the new sanctions plan, other than lists of more individuals. Diplomats played down expectations about the likely scope of additional measures, as the EU has already targeted Russia with several rounds of sanctions, including on its oil, coal and banking sectors.

The US Treasury has been approached for comment.