The price cap for Russian oil is back in play. Efforts can be blocked by Hungary | Company

Published by
Peter Kavinsky

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If the ceiling on Russian oil prices really happened, the European Union’s approach would align with the long-term efforts of the United States of America. They strive to keep the revenues of the Russian treasury as low as possible and to prevent oil prices in the markets from rising any further.

However, a possible price cap for Russian oil also encounters a number of potential obstacles, making the outcome of these potential European efforts by no means certain. Indeed, the decision on sanctions against Russia within the European community will run up against the requirement of unanimity, which can be very difficult in these turbulent times. Each member state of the European Union has different energy needs.

Representatives of EU member states are meeting with the European Commission this 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 cap Europe should set for Russian oil. According to the European Commissioner for Economy Paolo Gentiloni, the European Commission will make great efforts to ensure that this step is actually taken. The aim is to reach a provisional agreement on the price cap for Russian oil before the informal meeting of EU leaders in early October.

Question mark about 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 Russia’s supplies of natural gas and oil to Hungary stopped, our entire economy could stop functioning,” 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, criticizing all European sanctions against Russia in the area of ​​energy. In June, Hungary postponed the adoption of the EU’s oil sanctions package. The country only signed it after it received waivers giving Budapest access to oil from Russian pipelines.

For now, however, it remains unclear what effect a possible price cap would have on Russian oil. China or India have already announced not to join. However, according to the Americans, the price cap would still make sense and could at least be used to negotiate lower prices with Moscow. Adopting a ceiling would also mean that Member States would have to set aside their national interests in the name of European solidarity.

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Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org

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