Package will include lowering the existing oil price cap from $60 to $45 per barrel, as well as banning the use of Russian energy infrastructure - FT

Package will include lowering the existing oil price cap from $60 to $45 per barrel, as well as banning the use of Russian energy infrastructure - FT

In a significant move aimed at further isolating Russia, the U.S. and the European Union (EU) are set to implement new sanctions. The package includes lowering the existing oil price cap from $60 to $45 per barrel and banning the use of Russian energy infrastructure.

Lowering Oil Price Cap

The U.S. has been reluctant to lower the price cap on Russian oil, fearing potential impacts on its own oil industry. However, recent developments indicate a shift in stance. The U.S. and the EU are expected to reduce the price cap from $60 to $45 per barrel, according to sources [1]. This move is part of a broader strategy to curtail Russian energy exports and weaken its economy.

Banning Russian Energy Infrastructure

In addition to the price cap reduction, the U.S. and EU are planning to ban the use of Russian energy infrastructure. This includes oil refineries, pipelines, and storage facilities. The move is part of a coordinated effort to limit Russia's ability to transport and sell its energy products, particularly during a partial ceasefire [2].

The new sanctions are expected to complement existing measures, such as the EU's 17th package of sanctions against Moscow. The EU has already targeted Russian energy exports by increasing the number of ships in its shadow fleet and sanctioning firms associated with this activity [1].

Impact on Energy Markets

These new sanctions are likely to have significant implications for global energy markets. The reduction in oil price cap could lead to a decrease in Russian oil exports, potentially affecting global supply and prices. Additionally, the ban on Russian energy infrastructure could disrupt energy flows, particularly in Europe, which is heavily reliant on Russian gas.

Conclusion

The new sanctions package from the U.S. and EU represents a significant escalation in efforts to pressure Russia. By lowering the oil price cap and banning Russian energy infrastructure, these measures aim to further isolate Russia and weaken its economic capabilities. The impact on global energy markets is expected to be substantial, and investors should closely monitor developments.

References

[1] https://oilprice.com/Energy/Energy-General/Trump-Administration-Closes-in-on-Hard-Hitting-Sanctions-on-Russia.html
[2] https://kyivindependent.com/kremlin-names-energy-facilities-banned-from-strikes-during-partial-ceasefire/