Oil price cap under discussion: Germany proposes eighth package of sanctions

The EU has already passed seven packages of sanctions against Russia, and now Foreign Minister Baerbock is calling for further punitive measures.

Oil price cap under discussion: Germany proposes eighth package of sanctions

The EU has already passed seven packages of sanctions against Russia, and now Foreign Minister Baerbock is calling for further punitive measures. The eighth package could include a price cap on Russian oil. Russia should no longer benefit from the price increases on the markets.

Germany is promoting an eighth package of EU sanctions against Russia. Suggestions have been made about this, said Foreign Minister Annalena Baerbock on the sidelines of an EU meeting in the Czech capital of Prague. The Green politician did not give any details. After the most recent deliberations at the level of the G7 group of the leading democratic economic powers, however, the German government is likely to press for the introduction of an international upper price limit for Russian oil.

Proposals include forcing Russia to sell oil to big buyers like India at a much lower price in the future. The hope is that this will ease the markets. In addition, it should also ensure that Russia no longer benefits from rising oil prices and can thus fill its war chest.

In order to enforce the price cap, important services for oil transport could be linked to compliance with the price cap. For example, it could be decided that western insurance services for shipments of Russian oil would not be subject to sanctions regimes if the price cap is respected. There could be similar regulations for shipping companies whose ships transport Russian oil.

Baerbock emphasized that it is important for Germany that the sanctions because of the Russian war of aggression against Ukraine can be maintained in the long term - this applies above all to the energy issue. She was alluding to the fact that other EU countries have been demanding for months to ban all energy transactions with Russia in order to deprive the state of an important source of income.

Because of the still high dependence on Russian gas supplies, this is rejected by Germany, among others. It is also argued that such a measure could cause significantly worse economic damage in the EU than in Russia.

Because of the Russian attack against Ukraine, the EU has so far launched seven packages of punitive measures against Russia. The most recent included an import ban on Russian gold and tightened export controls on cutting-edge technology and civilian goods that could be used for military purposes. Among other things, severe financial sanctions were enacted beforehand, as well as an extensive oil embargo and an import ban on Russian coal.

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