KYIV, Ukraine (AP) — Russian authorities have rejected a price cap on the country’s oil set by Western supporters of Ukraine and threatened on Saturday to stop supplying countries that endorsed it.
Australia, Britain, Canada, Japan, the United States and the European Union 27 agreed on Friday cap what they would pay for Russian oil at $60 a barrel. The limit is expected to come into effect on Monday, along with an EU embargo on Russian oil shipped by sea.
Kremlin spokesman Dmitry Peskov said Russia needed to analyze the situation before deciding on a specific response, but would not agree to the price cap. Russia’s permanent representative to international organizations in Vienna, Mikhail Ulyanov, has warned that European supporters of the cap will come to regret their decision.
“From this year Europe will live without Russian oil,” Ulyanov tweeted. “Moscow has already made it clear that it will not supply oil to countries that support anti-market price caps. Wait, very soon the EU will accuse Russia of using oil as a weapon.
Ukrainian President Volodymyr Zelenskyy’s office, meanwhile, called for a lower price cap on Saturday, saying the one adopted by the EU and major Group of Seven economies did not go far enough.
“It would be necessary to lower it to $30 to destroy the enemy’s economy faster,” Zelenskyy’s bureau chief Andriy Yermak wrote on Telegram, claiming a position also favored by Poland – the one of the main critics of Russian President Vladimir Putin. war in Ukraine.
Under Friday’s agreements, insurance companies and other businesses needed to ship oil could only process Russian crude if the price of oil is at or below the cap. Most insurers are located in the EU and UK and may be required to meet the cap.
Russian crude is already selling at around $60 a barrel, a steep discount to international benchmark Brent, which closed Friday at $85.42 a barrel.
The Russian Embassy in Washington insisted that Russian oil “will continue to be in demand” and criticized the price limit as “reshaping the basic principles of how free markets work”. A message on the Embassy’s Telegram channel predicted that the cap per barrel would lead to “a generalized increase in uncertainty and higher costs for commodity consumers.”
“What happens in China will help determine whether the price cap has teeth,” said Jim Burkhard, oil markets analyst at IHS Markit. He said falling demand from China means most Russian crude exports are already selling below $60.
The price cap is intended to put economic pressure on Russia and further reduce its ability to finance a war which has killed countless civilians and combatants, driven millions of Ukrainians from their homes and weighed on the global economy for more than nine months.
The General Staff of the Armed Forces of Ukraine reported that since Friday, Russian forces have fired five missiles, carried out 27 airstrikes and launched 44 bombardments against military positions and civilian infrastructure in Ukraine.
Kyrylo Tymoshenko, deputy head of the president’s office, said the attacks killed one civilian and injured four others in Donetsk region in eastern Ukraine. According to the British Ministry of Defence, Russian forces ‘continue to invest much of their overall military effort and firepower’ around the small town of Donestsk, Bakhmut, which they have spent weeks trying to capture.
In Kherson province in southern Ukraine, whose capital of the same name was liberated by Ukrainian forces three weeks ago following a Russian retreatGovernor Yaroslav Yanushkevich said evacuations of civilians stuck in Russian-held territory across the Dnieper would temporarily resume.
Russian forces retreated to the east bank of the river last month. Yanushkevich said the ban on crossing the waterway would be lifted during the day for three days for Ukrainian citizens who “did not have time to leave the temporarily occupied territory”. His announcement referred to a “possible intensification of hostilities in this area”.
Kherson is one of four regions that Putin illegally annexed in September and pledged to defend as Russian territory. From their new positions, Russian troops have regularly shelled the city of Kherson and nearby infrastructure in recent days, leaving many residents without power. Running water remained unavailable in much of the city.
Other areas annexed in violation of international law are Donetsk, Lugansk and Zaporizhzhia.
Ukrainian authorities also reported heavy fighting in Luhansk and Russian shelling of the Kharkiv region in northeastern Ukraine, from which Russian soldiers mostly withdrew in September.
The mayor of the city of Kharkiv, which remained under Ukrainian control during the Russian occupation of other parts of the region, said some 500 apartment buildings were damaged beyond repair and nearly 220 schools and gardens children had been damaged or destroyed. He estimated the cost of the damage at $9 billion.
Russian Defense Minister Sergei Shoigu met Saturday in Minsk with the President and Defense Minister of Belarus, which hosts Russian troops and artillery. Belarus has said its own forces are not taking part in the war, but Ukrainian officials have frequently expressed concern that they could be tricked into crossing the border into northern Ukraine.
Belarusian President Alexander Lukashenko told the meeting that his troops and Russian forces were training in coordination. “We are preparing as a group, an army. Everyone knows it. We weren’t hiding it,” he said, quoted by the Interfax news agency.
Inna Varenytsia in Kherson, Ukraine, and Frank Bajak in Boston contributed to this report.
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