The European Union has resumed talks about a price cap on Russian oil with the member states hoping to come to agreement on the specifics.

The move comes as member states failed to reach an agreement on a price cap for Russian gas and are hoping that the talks for Russian oil are more successful. Just as was the case for natural gas, the European bloc has so far failed to agree on how strict the price cap should be or how it should be implemented.

Countries such as Poland are opposed to the EU executive arm’s proposal to set a US$65 per barrel limit, saying it was too generous to Russia, while others like Greece don’t want to go below that level.

According to Bloomberg, Russia’s premium grades are currently selling for US$52, which means a range of US$65- US$70 would fail to have the desired effect.

This has been acknowledged by European Commission Vice President Valdis Dombrovskis, who says: “If you put the price cap too high, it doesn’t really bite. Oil is the biggest source of revenue for the Russian budget, so it’s very important to get this right so it really has an impact on Russia’s ability to finance this war.”

AGREEMENT ON ‘IMPORTANT MEASURES’

First proposed by the US, the aim of the price cap is two-fold: to keep Russian oil flowing while also limiting Moscow’s revenue.

The EU diplomats will be hoping that talks on the cap actually succeed where recent plans to attempt to introduce price caps on natural gas prices across the bloc hit a dead-end after EU energy ministers on Thursday failed to reach an agreement amid deep divisions.

Czech Industry Minister Jozef Sikela has, however, said the ministers did manage to agree on other “important measures”, including joint gas purchases, supply solidarity in times of need, and expediting the authorisation process for renewable energy.

Sikela has also revealed that the ministers will meet again in December to try and work out their differences. Earlier this week, the European Commission issued a statement whereby it declared what it called a “safety price ceiling” for gas prices set at €275, or US$283, per megawatt-hour.