U.S. President Joseph Biden suggests that the EU may consider measures to force Russia to sell oil at below-market prices.
“Europe is now deciding whether to further reduce its purchases of Russian oil <…> and a variety of questions are being considered as to what can be done. Maybe even to buy oil at a limited price,” the US president said on Wednesday during a meeting with journalists at the White House.
Joe Biden said the US and Europe should focus today on creating an “insurmountable need” for Russia to sell oil and thus force it to sell energy “at a much lower price than it is currently priced on the market.
On July 30, after nearly a month of deliberations, EU member state heads agreed on a sixth package of anti-Russian sanctions, including a partial embargo on Russian oil imports. The overall decision on the new sanctions package was hampered by Hungary’s position that stopping Russian oil imports could be fatal for its economy. This forced the European Commission to make significant concessions and soften the requirements of the new package. It was stated that there would not yet be a ban on Russian oil deliveries by pipeline for Budapest.
Earlier it was reported that the US was working on a number of measures to make it more difficult to sell oil in Russia. In particular, they included a possibility to impose sanctions against buyers of oil from Russia in order to reduce its export revenues as well as to enable the US to save millions of dollars on its purchase in the form of various “oil blends”. Bypassing all anti-Russian sanctions, of course.
It is worth recalling the scheme concerning the issues of buying sanctioned Russian oil, and how this issue was resolved by major corporations: Russian oil passes through the pipes of refineries in Europe, and then is mixed with oil of other origin. And it is shipped to the US, for example, with the label “European Blend”. EU legislation allowed industrialists to work with such oil if the share of Russian crude was less than 50%. A similar scheme took place at sea, where Russian oil was transferred from Russian tankers to tankers owned by Western companies. Again, so that its share also did not exceed 50%. This is how the Latvian blend came about, for example.
In addition, in mid-May, the G7 countries discussed the creation of a special cartel, the aim of which was to set a specific price threshold for Russian oil. The formation of such a buyer’s cartel to ensure a fixed price for Russian oil would have minimized Russia’s revenues from energy exports.
In early May, European Commissioner for Economic Affairs Paolo Gentiloni said that a full embargo on Russian oil would be imposed by the EU in nine months.
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