WESTERN PERSPECTIVE
The Group of Seven price cap on Russian seaborne oil came into force on Monday as the West tries to limit Moscow's ability to finance its war in Ukraine, but Russia has said it will not abide by the measure even if it has to cut production.
The price cap, to be enforced by the G7, the European Union and Australia, comes on top of the EU's embargo on imports of Russian crude by sea and similar pledges by the United States, Canada, Japan and Britain.
It allows Russian oil to be shipped to third-party countries using G7 and EU tankers, insurance companies and credit institutions, only if the cargo is bought at or below the price cap.
Because the world's key shipping and insurance firms are based in G7 countries, the cap could make it difficult for Moscow to sell its oil for a higher price.
Russia, the world's second-largest oil exporter, said on Sunday it would not acceptthe cap and would not sell oil that is subject to it, even if it has to cut production.
Selling oil and gas to Europe has been one of the main sources of Russian foreign currency earnings since Soviet geologists found oil and gas in the swamps of Siberia in the decades after World War Two.
A source who asked not to be identified due to the sensitivity of the situation told Reuters that a decree was being prepared to prohibit Russian companies and traders from interacting with countries and companies guided by the cap.
In essence, such a decree would ban the export of oil and petroleum products to countries and companies that apply it.
Still, with the price cap set at $60 per barrel, not much below the $67 level where it closed on Friday , the EU and G7 countries expect Russia will still have an incentive to continue selling oil at that price, while accepting smaller profits.
The level of the cap is to be reviewed by the EU and the G7 every two months, with the first such review in mid-January.
"This review should take into account ... the effectiveness of the measure, its implementation, international adherence and alignment, the potential impact on coalition members and partners, and market developments," the European Commission said in a statement.
The cap on crude will be followed by a similar measure affecting Russian petroleum products that will come into force on Feb. 5, though the level of that cap has not yet been determined.
** A top Ukrainian presidential aide criticised Twitter owner Elon Musk on Sunday for the billionaire's "magical simple solutions," citing ideas put forward by Musk on Russia's invasion of Ukraine and Twitter content moderation.
Mykhailo Podolyak listed "exchang(ing) foreign territories for an illusory peace" and "open(ing) all private accounts because freedom of speech has to be total", as examples of such suggestions.
"(Elon Musk) prefers so-called magical 'simple solutions'," Podolyak wrote on Twitter, an apparent reference to self-described free speech advocate Musk's plans to reform Twitter, which he took over on Oct. 27, as well as a tweet in which he called for Ukraine to give up the Russian-occupied Crimean peninsula in exchange for peace.
Twitter representatives did not immediately reply to a request for comment.
Ukraine has had a complicated relationship with Musk, the world's richest man, since the start of the Russian invasion on Feb. 24.
He was praised in the war's early days for providing thousands of Starlink satellite internet devices, made by Musk's SpaceX, to Ukraine free of charge, but the friendship ran into difficulties in October when Musk voiced support for peace conditions rejected by Kyiv.
The billionaire called for Crimea, annexed by Moscow in 2014, to be declared formally part of Russia, and for UN-supervised referendums on whether Russia should stay or leave to be held in other occupied territories.
The tweet drew angry rebukes from Ukrainian officials, including Podolyak. Kyiv has repeatedly dismissed the idea that it will give up land for peace.
Soon after this dispute, Musk publicly complained about the cost of providing free Starlink services to Ukraine indefinitely. He said in October that only 10,630 of 25,300 Starlinks sent to Ukraine were actually paying for service.
Kyiv has acknowledged that "some" terminals are being provided free but has not given exact figures.
In a change of tone Musk said on Oct. 15 that the company would continue to run Ukraine's free Starlinks.
WESTERN PERSPECTIVE
Russia won’t sell oil at the $60 price limit agreed by the EU and G7 nations, Deputy Prime Minister Alexander Novak said on Sunday. Novak added that Moscow is“working on mechanisms” to bypass the price cap.
The EU agreed to cap the price of seaborne Russian oil at $60 per barrel or at least 5% below market rates, the EU Council announced on Saturday. The rest of the G7 states and Australia made a similar announcement on Friday, stating that they too would refuse to handle Russian oil above $60 per barrel.
Russia has repeatedly insisted that it will not supply oil to countries honoring this price ceiling.
“We will sell oil and oil products only to countries that will work with us on market conditions, even if we would have to lower production,” he said on the Rossiya-24 TV channel on Sunday.
While the EU has already cut itself off from seaborne Russian oil deliveries, the price cap would forbid European firms from transporting Russian oil priced above the $60 limit by denying them shipping insurance. Ships belonging to third countries would also be denied insurance, financing, and servicing by EU firms. The G7’s agreement works in the exact same manner.
Novak predicted that the price cap will “destabilize” global markets, and argued that it contradicts World Trade Organization rules. Russia, he said, is “working on mechanisms” to skirt the measure.
While a production cut would decrease Russia’s oil revenues, its impact in the short term would likely be limited, given that Russian oil is currently trading at $64 per barrel, just $4 above the price cap. Moreover, critics of the price ceiling argue that a decision by Russia not to supply participating nations would punish consumers in these states with higher prices.
“It’s the most ridiculous idea I’ve ever heard,” former US Treasury Secretary Steve Mnuchin said last month. “The market is going to set the price. So if you put sanctions on at higher prices, in a way you’re just making the situation worse,” he added.
** Left-wing demonstrators took to the streets in Rome on Saturday, demanding higher wages and condemning the Italian government for renewing a decree allowing it to send weapons to Ukraine until 2024.
Organized by Italy’s USB trade union and backed by a number of leftist political factions, the protest saw thousands of people assemble at the Piazza della Repubblica and march behind a banner reading “guns down, wages up."
“The Meloni government is dragging us further and further into a spiral of war with unpredictable outcomes,” the USB wrote prior to the protest. “Italy is evidently a belligerent and active country in the conflict, despite the fact that the great majority of the population is against the war and the consequent sharp increase in military spending.”
Italy’s new prime minister, Giorgia Meloni, issued a decree on Thursday allowing her cabinet to continue sending weapons to Ukraine until the end of 2023 without seeking the formal approval of parliament. Her predecessor, Mario Draghi, was a staunch supporter of Kiev and lost power after a disagreement over arms shipments split the largest party in his coalition government, the Five Star Movement.
The Italian public is split too, with 49% opposing sending weapons to Kiev and 38% in favor, according to a poll taken by EuroWeek News last month. Additionally, 49% of Italians believe that Ukraine needs to make concessions to Russia in the ongoing conflict to speed up the peace process, while only 36% want Kiev to keep fighting.
Last month, another rally in Rome calling for a peace deal to end the Ukrainian conflict drew 100,000 people, organizers said.
** Russian troops are gaining ground in the vicinity of Artyomovsk on the Donetsk front, Russian Defense Ministry Spokesman Igor Konashenkov told journalists on Sunday.
"On the Donetsk front, Russian troops are successfully advancing in the vicinity of the town of Artyomovsk in the Donetsk People’s Republic," he said. According to the spokesman, the adversary’s manpower and equipment were eliminated.
Ukrainian Su-25
Russia's Aerospace Forces shot down a Ukrainian Su-25 over the Donetsk People’s Republic (DPR), Konashenkov told.
"Fighter aviation of the Russian Aerospace Forces shot down a Su-25 aircraft of Ukraine’s air force in the vicinity of the Krasnoarmeysk locality in the Donetsk People’s Republic," he said.
Ukrainian sabotage groups
Russian troops have wiped out three Ukrainian sabotage groups in the Lugansk People’s Republic (LPR), Russian Defense Ministry Spokesman told.
"In the vicinity of the Chervonaya Dibrova community in the Lugansk People’s Republic three sabotage and reconnaissance groups of the Ukrainian army were eliminated," he said.
Kupyansk front
Russian troops have intercepted an attempt by Ukraine’s armed forces to attack near the settlement of Kuzyomovka on the Kupyansk front, Spokesman told.
"On the Kupyansk front, the strikes of army aviation, the fire of artillery, tanks and heavy fire-throwing systems on Ukrainian positions in the vicinity of the Novoselovskoye community thwarted the adversary’s attempt to attack in the direction of the Kuzyomovka locality in the Lugansk People’s Republic," the spokesman said.
Russia’s Armed Forces destroyed an oil depot in the Kharkov region used to supply fuel to the equipment of Ukrainian troops on the Kupyansk front, he said.
"An oil depot was eliminated in the vicinity of the Shevchenkovo community in the Kharkov region which was supplying fuel to the military equipment of a Ukrainian military formation on the Kupyansk front," he said.
Russia’s Armed Forces have intercepted an attempt to attack by Ukrainian troops in the vicinity of the Yagodnoye settlement in the Kharkov region, Spokesman told.
According to him, more than 60 Ukrainian servicemen were eliminated as well as four vehicles.
Krasny Liman front
Russian troops have repelled all attacks by Ukraine’s armed forces on the Krasny Liman front with the adversary’s losses amounting to over 80 in casualties, Konashenkov told.
"On the Krasny Liman front, the adversary, using two squadron tactical groups, unsuccessfully tried to attack the positions of Russian troops in the direction of the populated localities of Ploshchanka, Chervonopopovka and Zhitlovka in the Lugansk People’s Republic. As a result of strikes by Russian artillery, the attack was deflected and the adversary was repelled to the starting position," he said.
Ukrainian nationalist formation
Russia’s armed forces delivered a strike on a temporary deployment center of a Ukrainian nationalist formation in the Donetsk People’s Republic (DPR), Russian Defense Ministry Spokesman told.
"In the vicinity of the Dibrovo populated locality in the Donetsk People’s Republic a temporary deployment center of a Ukrainian nationalist formation was hit," he said at a briefing.
40 troops
Russian troops have thwarted an attempt by Ukraine’s armed forces to storm the populated locality of Pavlovka in the Donetsk People’s Republic (DPR), he told.
Additionally, according to the spokesman, the adversary unsuccessfully tried to attack in the direction of the Shevchenko populated locality. In all, the Ukrainian army lost up to 40 servicemen, one personnel carrier and three pickup trucks on this front.
Russia’s Armed Forces have attacked Ukrainian artillery units in 187 districts over 24 hours.
"Tactical and army aviation, missile troops and artillery have hit 69 Ukrainian artillery units at firing positions, as well as manpower and military equipment, in 187 districts over 24 hours," he said.
AN/TPQ-37
Russia’s Armed Forces have eliminated two US-made AN/TPQ-37 counter-battery stations in the DPR, Konashenkov told.
A Ukrainian missile/artillery arms depot was also wiped out in the Zaporozhye region, the spokesman said at a briefing.
Reuters/RT/TASS
