With an oil price cap, the G7 begins to press Russia on Ukrainew

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KYIV: As the West attempts to limit Moscow’s ability to finance its war in Ukraine, a price cap imposed by the Group of Seven (G7) on Russian seaborne oil went into effect on Monday. However, Russia has stated that it will not abide by the measure, even if it means cutting production.

After members of the European Union overcame opposition from Poland, the G7 nations and Australia reached an agreement on Friday to impose a price limit of $60 per barrel on Russian seaborne crude oil. Russia is the second-largest oil exporter in the world.

Volodymyr Zelenskiy, the president of Ukraine, said that the world had shown weakness by setting the cap at that level. Alexander Novak, the deputy prime minister of Russia, said on Sunday that it was a big interference that was against the rules of free trade.

The official in charge of Russia’s oil, gas, atomic energy, and coal said, “We are working on mechanisms to prohibit the use of a price cap instrument, regardless of what level is set, because such interference could further destabilize the market.”

He stated, “We will sell oil and petroleum products only to those countries that will cooperate with us under market conditions, even if we have to slightly reduce production.”

Only if the cargo is purchased at or below the $60 per barrel cap is Russian oil permitted to be shipped to third-party countries by G7 and EU tankers, insurance companies, and credit institutions under the G7 agreement.

In October, representatives from the industry and a representative from the United States stated that Russia has sufficient tankers to ship the majority of its oil beyond the cap, highlighting the limitations of the most ambitious strategy to reduce Russia’s wartime revenue.

Zelenskiy asserts that the $60 cap would not significantly deter Russia from waging war in Ukraine. Setting such a limit on Russian prices, which is quite reasonable for the budget of a terrorist state, would not be considered a serious decision.

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

However, Ukraine and its Baltic allies criticized French President Emmanuel Macron over the weekend for suggesting that the West should think about Russia’s need for security guarantees if it agrees to talks to end the war.

Mykhailo Podolyak, an aide to Zelenskiy, stated that Russia needed security assurances from the world rather than the other way around.

Planned blackouts

In Ukraine, Russia has been beating the power framework since early October, causing power outages and leaving millions without warming as temperatures dive.

Russia claims that the attacks are meant to weaken Ukraine’s ability to fight and do not target civilians.

The attacks, according to Ukraine, are a war crime.

In a video address on Sunday, Zelenskiy urged citizens to be patient and strong in the face of winter’s challenges.

He stated, “We must be even more resilient and even more united than ever to get through this winter.”

Vitaliy Klitschko, mayor of Kyiv, stated on Telegram that blackouts would be limited to planned “stabilization” cutoffs on Monday to restore grid service, but that the situation remained “difficult.”

DTEK, the largest power provider in Ukraine, stated that blackouts were planned for three additional regions in Ukraine’s south and east: Odesa, Donetsk, and Dnipropetrovsk.

According to the regional governor, 85% of customers in Kherson had access to electricity, despite the fact that the southern city had been abandoned by Russian forces a month ago.

Shelling along front lines

Zelenskiy said that on the battlefield, Ukrainian forces were holding positions near Bakhmut, which was thought to be Russia’s next target in their advance through Donetsk.

According to the Ukrainian military, Russian forces pressed for improved tactical positions in order to advance on Bakhmut and the town of Avdiivka, both of which are located within Ukrainian-controlled territory.

According to Russia’s defense ministry, its troops had repelled Ukrainian attacks in the direction of Donetsk and were carrying out successful operations in the Bakhmut region.

On the Ukrainian-held side of the Kakhovka reservoir, in opposition to the Russian-held Zaporizhzhia nuclear power plant, Russian forces also shelled 25 settlements along the front lines in the south, including Kherson and Nikopol.

Zaporizhzhia city administration secretary Anatoliy Kurtev said on Monday that Russian forces had fired rockets at energy and industrial infrastructure overnight.

Reuters was unable to independently verify reports from the battlefield.

According to the head of US intelligence, fighting in Ukraine was taking place at a “reduced tempo” and militaries on both sides were looking to upgrade and resupply in preparation for a counter-offensive following the winter.

 

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