Ukraine war

G7 begins to pressure Russia on Ukraine by capping oil prices

Father Victor blows candles out after holding a Sunday service in the basement of his church, in Siversk, Ukraine, December 4, 2022. (Photo: REUTERS/ Leah Millis)

As the West attempts to limit Moscow's capacity to finance its conflict in Ukraine, a Group of Seven (G7) price limitation on Russian seaborne oil went into effect on Monday. However, Russia has stated that it will not comply with the measure, even if it means reducing production.

The G7 nations and Australia agreed on a $60 per barrel quota on Russian seaborne crude oil on Friday after European Union members overcame Poland's opposition. Russia is the second-largest oil exporter in the world.

Ukrainian President Volodymyr Zelenskiy stated that the world exhibited weakness by putting the cap at that level, while Russian Deputy Prime Minister Alexander Novak stated on Sunday that it was an egregious intrusion that violated the principles of free commerce.

Novak, the Russian government official in charge of its oil, gas, atomic energy, and coal, stated, "We are working on methods to restrict the adoption of a price cap instrument, no matter what level is established, since such meddling might further destabilize the market."

"We will only sell oil and petroleum products to countries who are willing to cooperate with us under market circumstances, even if it means a slight reduction in production," he stated.

The G7 agreement permits the shipment of Russian oil to third parties through G7 and EU tankers, insurance firms, and financial institutions only if the cargo is purchased at or below the $60 per barrel ceiling.

Industry participants and a U.S. official stated in October that Russia had access to sufficient ships to transfer the majority of its oil outside the cap's reach, highlighting the limitations of the most ambitious effort yet to limit Russia's wartime revenues.

According to Zelenskiy, the $60 limit would have little effect on Russia's decision to wage war against Ukraine. Setting such a limit for Russian prices, which is rather comfortable for the budget of a terrorist state, is hardly a serious move.

Since Russia invaded Ukraine on February 24, the United States and its allies have placed severe sanctions on Russia and provided billions of dollars in help to the Ukrainian government.

Ukraine and its Baltic allies criticized French President Emmanuel Macron over the weekend for proposing that the West should consider Russia's need for security guarantees if it agrees to negotiations to end the war.

Mykhailo Podolyak, an advisor to Zelenskiy, stated that the world required security guarantees from Russia, not the other way around.

Planned blackouts

Since early October, Russia has bombarded Ukraine's electricity infrastructure, producing blackouts and leaving millions without heat as temperatures plunge.

Russia asserts that the attacks do not target people and are intended to weaken Ukraine's fighting capabilities.

Ukraine asserts that the assaults constitute a war crime.

In a video message delivered on Sunday, Zelenskiy advised locals to be patient and resilient in the face of winter's rigors.

"To survive this winter, we must be more tough and united than ever before," he remarked.

Vitaliy Klitschko, the mayor of Kyiv, stated on Telegram that blackouts will be limited to "stabilisation" cuts to restore grid functionality beginning on Monday, but that the situation remained "tough."

DTEK, the main energy provider in Ukraine, announced that blackouts were planned for three other regions: Odesa, Donetsk, and Dnipropetrovsk in the country's south and east.

In Kherson, which has been mostly without energy since Russian forces abandoned the southern city last month, the regional government reported that 85 percent of clients had power.

Shelling along the front lines

On the battlefront, Zelenskiy reported that Ukrainian forces were holding locations along the front line, particularly near Bakhmut, which was seen as the next objective of the Russian offensive through Donetsk.

According to Ukraine's military, Russian forces pushed for improved tactical positions to march on Bakhmut and the town of Avdiivka, both of which are located barely inside Ukrainian territory.

The Russian defense ministry reported that its troops were conducting successful operations in the Bakhmut region and had repelled Ukrainian attacks in the direction of Donetsk.

In addition, Russian forces shelled 25 settlements along the southern front lines, including Kherson and Nikopol - on the Ukrainian-held side of the Kakhovka reservoir, opposite the Russian-held Zaporizhia nuclear power facility.

Anatoliy Kurtev, the secretary of the city administration of Zaporizhzhia, stated on Monday that Russian soldiers had overnight fired rockets at industrial and energy facilities.

Reuters was unable to independently confirm accounts from the battlefield.

The head of U.S. intelligence stated that fighting in Ukraine was occurring at a "lower tempo" and that both sides were preparing for a spring attack by refitting and resupplying their forces.

Publish : 2022-12-05 09:29:00

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