Russia Rejects G7 Oil Price Cap


Russia is rejecting a price cap of $60 a barrel on Russian oil imposed by the Group of Seven and its allies, TASS quoted Kremlin spokesman Dmitry Peskov as saying Saturday. “We will not accept this ceiling.”

Russia threatened to turn off the oil spigot on the coalition of Western countries that endorsed the cap.

Australia, Britain, Canada, Japan, the United States and the 27-nation European Union agreed Friday to set the price for Russian oil at $60-per-barrel. The limit will take effect Monday.

The Russian Embassy in Washington said Saturday it will continue to find buyers for its oil, despite what is called “dangerous” attempts by the West to introduce a price cap on its oil exports.

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

The cap proposed by U.S. Treasury Secretary Janet Yellen aims to reduce Russia’s oil earnings that support its military and the invasion of Ukraine. But there are questions about how effective the cap will be.

The Monday start date coincides with the European Union’s embargo on most Russian oil shipments. There’s uncertainty about how all this will affect oil markets, which are swinging between fears of lost Russian supply and weakening demand caused by the lagging global economy. Russia could retaliate by halting shipments, and Europe may struggle to replace imports of Russian diesel fuel.

Ukraine calls for lower price cap

The office of Ukrainian President Volodymyr Zelenskyy, meanwhile, called Saturday for an even lower price cap.

“It would be necessary to lower it to $30 [per barrel] in order to destroy the enemy’s economy faster,” Andriy Yermak, the head of Zelenskyy’s office, wrote on Telegram, staking out a position also favored by Poland — a leading critic of Russian President Vladimir Putin’s war in Ukraine.

The West feels that such a reduction in price could undercut the cost of Russian oil production.

“We think the number at $60 a barrel is appropriate” to balance limiting Moscow’s ability to profit and ensuring supply meets demand, John Kirby, U.S. National Security Council coordinator for strategic communications, said Friday, adding that the cap can be adjusted going forward.

Russia has resumed shelling the southern Ukrainian city of Kherson. Officials warned that Ukraine faces a tough winter because of the Russian strikes on its energy infrastructure.

“Russian invaders shelled Kherson — damaged power grids. The city was left without electricity again,” Governor Yaroslav Yanushevych said on Telegram, adding that technicians were already working to restore power to the recently liberated city on the right bank of the Dnipro River.

Officials in Kherson announced they will help citizens evacuate parts of Russian-occupied territory on the east bank of the Dnipro River amid concerns of intensified fighting in the area.

After Russia’s retreat from Kherson, Ukrainian forces may consider advancing south through the fields of the Zaporizhzhia region to recapture occupied territory and repel the invaders, according to The Washington Post.

Their aim would be to control the land bridge that connects Russia to Crimea. Their counteroffensive must wait, though, until the cold sets in and the muddy ground freezes.

A hardened ground would allow their military vehicles to gain more traction. It’s common for some heavy artillery vehicles to get stuck in mud during warmer weather.

Russia prioritizes Bakhmut

Meanwhile, Russia is investing a large amount of its “over all military effort and firepower,” the British Defense Ministry said Saturday, along a “15-kilometer sector of entrenched front line around the Donetsk Oblast town of Bakhmut” in Ukraine.

“Russia has prioritized Bakhmut as its main offensive effort since early August 2022,” the ministry said in its daily update posted on Twitter. “The capture of the town would have limited operational value although it would potentially allow Russia to threaten the larger urban areas of Kramatorsk and Sloviansk,” according to the report.

However, the defense ministry said, “The campaign has been disproportionately costly” and “Bakhmut’s capture has become a symbolic, political objective for Russia.”

Zelenskyy said in his daily address Friday he and his staff have been working all week “at various levels in European capitals in order to gain a critical mass of support for the launch of a special tribunal – a tribunal on Russian aggression … I am sure that there will be a tribunal, there will be justice” for the Russian invasion of Ukraine.

The White House said U.S. President Joe Biden has “no intentions” at present of holding negotiations with Russian President Vladimir Putin about ending the war in Ukraine, a day after Biden appeared to make a conditional offer to talk to his Russian counterpart.

“We’re just not at a point now where talks seem to be a fruitful avenue to approach right now,” White House national security spokesperson John Kirby told reporters Friday.

When asked about those comments Friday, Kirby noted that Biden said Putin has yet to show any interest in talking.

“Putin has shown absolutely no inclination to be interested in dialogue of any kind. In fact, quite the contrary,” Kirby said.

“The president wasn’t at all indicating that now is the time for talks,” said Kirby. “In fact, he has been consistent that only [Ukrainian] President Zelenskyy can determine if and when there’s going to be a negotiated settlement and what the circumstances around that settlement would look like.”

The Kremlin said Friday that Putin is ready for negotiations with the West — provided the West recognizes Russia’s “new territories” taken from Ukraine.

Kremlin spokesperson Dmitry Peskov told reporters: “The president of the Russian Federation has always been, is and remains open to negotiations in order to ensure our interests.”

Also Friday, Putin spoke on the phone with Germany’s Chancellor Olaf Scholz. Scholz is quoted as telling Putin “there must be a diplomatic solution as quickly as possible, which includes a withdrawal of Russian troops.”

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