Russia rejects $60-a-barrel cap on its oil, warns of cutoffs

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KYIV, Ukraine (AP) — Russian authorities have rejected a price cap on the country’s oil by Ukraine’s Western supporters and on Saturday threatened to stop supplying countries that endorsed it.

Australia, Britain, Canada, Japan, the United States and the 27-nation European Union agreed on Friday to limit what they would pay for Russian oil to $60 a barrel. The limit goes into effect Monday, along with an EU embargo on Russian oil transported by sea.

Kremlin spokesman Dmitry Peskov said Russia needs to analyze the situation before deciding on a specific response, but that it will not accept the price cap. Russia’s permanent representative to international organizations in Vienna, Mikhail Ulyanov, warned that the CAP’s European backers would 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 those countries that support price caps against the market. 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, because the rate set by the EU and the leading economies of the Group of Seven did not go far enough.

“It would be necessary to lower it to $30 to destroy the enemy’s economy more quickly,” Andriy Yermak, the head of Zelenskyy’s office, wrote on Telegram, taking a position also favored by Poland – a leading critic of Russian President Vladimir Putin’s war in Ukraine.

Under Friday’s agreements, insurance companies and other firms tasked with shipping oil would only be able to deal with Russian crude if the price of the oil is at or below the limit. Most insurers are based in the EU and the UK and may be required to adhere to the cap.

Russian crude is already selling for about $60 a barrel, a big discount to the 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 cap for “reshaping the basics of how free markets function”. A post on the embassy’s Telegram channel predicted that the cap per barrel would lead to “a widespread increase in uncertainty and higher costs for consumers of raw materials”.

“What’s happening in China will help determine whether the price ceiling has teeth,” said Jim Burkhard, an oil market analyst at IHS Markit. He said subdued demand from China means most Russian crude oil exports are already selling below $60.

The price cap is designed to put economic pressure on Russia and further reduce its ability to finance a war which has killed untold numbers of civilians and combatants, displaced millions of Ukrainians from their homes and weighed on the global economy for more than nine months.

The General Staff of the Ukrainian Armed Forces reported that Russian armed forces had fired five rockets, carried out 27 airstrikes and launched 44 shellings against Ukraine’s military positions and civilian infrastructure since Friday.

Kyrylo Tymoshenko, the deputy head of the president’s office, said the attacks killed one civilian and injured four others in the Donetsk region of eastern Ukraine. According to the British Ministry of Defence, Russian troops “continue to invest a large part of their overall military effort and firepower” around the small town of Bakhmut in Donestsk, which they have been trying to capture for weeks.

In the southern Ukrainian province of Kherson, whose capital of the same name was liberated by Ukrainian troops after a Russian withdrawal three weeks agoGov. Yaroslav Yanushkevich said evacuation of civilians trapped in Russian-occupied territory across the Dnieper River will resume temporarily.

Russian troops retreated to the eastern bank of the river last month. Yanushkevich said a ban on crossing the waterway for three days during the day would be lifted for Ukrainian citizens who “did not have time to leave the temporarily occupied territory”. His announcement mentioned a “possible intensification of hostilities in this area”.

Kherson is one of four regions that Putin illegally annexed in September and promised to defend as Russian territory. From their new positions, Russian forces 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.

The other regions annexed in violation of international law are Donetsk, Luhansk and Zaporizhzhia.

Ukrainian authorities also reported heavy fighting in Luhansk and Russian shelling of the Kharkiv region of northeastern Ukraine, from which most Russian soldiers 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 kindergartens were damaged or destroyed. He estimated the cost of the damage at $9 billion.

Russian Defense Minister Sergei Shoigu met with the president and defense minister of Belarus, which hosts Russian troops and artillery, on Saturday in Minsk. Belarus has said its own armed forces are not taking part in the war, but Ukrainian officials have often expressed concern that they could be persuaded to cross the border into northern Ukraine.

Belarusian President Alexander Lukashenko said at the meeting that his troops and Russian troops are training in coordination. “We are preparing as one faction, one army. Everyone knows. We didn’t hide it,” he told the Interfax news agency.

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Inna Varenytsia in Kherson, Ukraine, and Frank Bajak in Boston contributed to this report.

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Follow AP’s coverage of the war in Ukraine:

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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