If the capping of Russian oil prices really happened, the approach of the European Union would align with the long-term efforts of the United States of America. They strive to ensure that the income of the Russian state coffers is as small as possible and that oil prices on the markets do not rise any further.
However, a possible price ceiling on Russian oil also runs into several possible obstacles, due to which the outcome of these potential European efforts is not at all certain. Indeed, the decision on sanctions against Russia within the European community runs into the requirement of unanimity, and this can be very difficult in this turbulent time. Each member state of the European Union has different energy needs.
Representatives of EU member states are to meet with the European Commission at the weekend to discuss possible new sanctions against the Russian economy. In addition to the oil price cap, other restrictive measures against Russian citizens and entire industries are also being considered.
According to Bloomberg sources, it is not yet clear what price ceiling Europe should set for Russian oil. According to the European Commissioner for the Economy, Paolo Gentiloni, the European Commission will make great efforts to ensure that this step actually happens. The aim is for a preliminary agreement on the price ceiling for Russian oil to be negotiated before the informal meeting of EU leaders at the beginning of October.
Question mark over Hungary
However, the biggest question mark hangs over Hungary, which often blocks European efforts towards the Russian state. Hungarian Foreign Minister Péter Szijjártó stated on Friday that Russia remains an indispensable energy supplier for them.
“If Russian supplies of natural gas and oil to Hungary were to stop, then our entire economy may cease to function,” Szijjártó said in a Facebook video. “That’s why it’s very important for us to have predictable supplies from Russia’s Gazprom,” he added.
Hungarian Prime Minister Viktor Orbán launched a campaign for the upcoming elections a few weeks ago, in which he criticizes all European sanctions against Russia in the field of energy. In June, Hungary postponed the adoption of the EU’s oil sanctions package. The country only signed it after receiving exemptions that allowed Budapest access to oil from Russian pipelines.
For now, however, it remains unclear what effect a possible price ceiling would have on Russian oil. China or India have already announced that they will not join it. According to the Americans, however, the price ceiling would still make sense and could at least be used to negotiate lower prices with Moscow. Adopting a cap would also require member states to set aside their national interests in the name of European solidarity.