Zelensky warns oil decision by G7 and Australia will do little to deter Putin

Kyiv: Ukrainian President Volodymyr Zelensky say a $US60 price cap on seaborne Russian oil agreed to by the Group of Seven nations and Australia is not serious and will do little to deter Russia from waging war in Ukraine.

Australia, Britain, Canada, Japan, the United States and the 27-nation European Union agreed on Saturday to cap what they would pay for Russian oil at $US60 ($88) per barrel. The limit is set to take effect Monday, along with an EU embargo on Russian oil shipped by sea.

Ukrainian President Volodymyr Zelensky says the cap will not deter Russia’s war efforts.Credit:AP

The measure aims to reduce Russia’s income from selling oil while preventing a spike in global prices.

Treasurer Jim Chalmers said the $US60 was a “sufficient incentive” for Russia to continue to supply oil to global markets while at the same time restricting the revenue it receives from its oil exports, and curtailing its ability to fund the invasion of Ukraine.

“While the price cap will not completely address the impact of Russia’s war on global energy prices, it’s intended to help support stability in global energy markets and ease further pressure on global oil prices,” he said.

In response, the Kremlin has said Russia “will not accept” a price cap on its oil and is analysing how to respond.

Zelensky has also criticised the agreement saying the world had shown weakness by setting the cap at $US60, which would swell Russia’s budget by $US100 million a year

“You wouldn’t call it a serious decision to set such a limit for Russian prices, which is quite comfortable for the budget of a terrorist state,” Zelensky said in a video address.

Ukrainian President Volodymyr Zelensky inspects damaged buildings as he visits town of Vyshgorod outside the capital Kyiv.Credit:AP

“It’s only a matter of time before stronger tools will have to be used anyway. It is a pity that this time will be lost.”

Andriy Yermak, head of Zelensky’s administration, said earlier that the cap should be set at $US30 “to destroy the enemy’s economy quicker”.

Kremlin spokesman Dmitry Peskov said Moscow had made preparations for Saturday’s price cap announcement.

“We will not accept this cap,” RIA news agency quoted him as saying. He added that Russia would conduct a rapid analysis of the agreement and respond after that, RIA reported.

Russia has repeatedly said it will not supply oil to countries that implement the cap – a stance reaffirmed by Mikhail Ulyanov, Moscow’s ambassador to international organisations in Vienna, in posts on social media on Saturday.

“Starting from this year Europe will live without Russian oil,” he said.

The G7 price cap will allow non-EU countries to continue importing seaborne Russian crude oil, but it will prohibit the shipping, insurance and reinsurance companies from handling cargoes of Russian crude around the globe unless it is sold for less than $US60. That could complicate the shipment of Russian crude priced above the cap, even to countries that are not part of the agreement.

Russian Urals crude traded at around $US67 a barrel on Friday.

US Treasury Secretary Janet Yellen said the cap will particularly benefit low- and medium-income countries that have borne the brunt of high energy and food prices.

“With Russia’s economy already contracting and its budget increasingly stretched thin, the price cap will immediately cut into (President Vladimir) Putin’s most important source of revenue,” Yellen said in a statement.

In comments published on Telegram, Russia’s embassy in the United States criticised what it called the “dangerous” Western move and said Moscow would continue to find buyers for its oil.

“Steps like these will inevitably result in increasing uncertainty and imposing higher costs for raw materials’ consumers,” it said.

“Regardless of the current flirtations with the dangerous and illegitimate instrument, we are confident that Russian oil will continue to be in demand.”

Reuters, AP

Get a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for the weekly What in the World newsletter here.

Most Viewed in World

From our partners

Source: Read Full Article