EU Agrees to Cap Russian Oil at $60 per Barrel

European Union flags fly outside the European Commission headquarters in Brussels (Reuters)
European Union flags fly outside the European Commission headquarters in Brussels (Reuters)
TT

EU Agrees to Cap Russian Oil at $60 per Barrel

European Union flags fly outside the European Commission headquarters in Brussels (Reuters)
European Union flags fly outside the European Commission headquarters in Brussels (Reuters)

European countries agreed to cap Russian oil price at $60 per barrel to further weaken Moscow's ability to finance its war in Ukraine.

With this agreement, the bloc countries joined their allies in the Group of Seven (G7), especially the US, UK, and Australia, after Poland obstructed the measure before it withdrew its objection on Friday evening.

The cap is set to be implemented starting Monday when the European Union's embargo on Russian seaborne crude goes into force.

Energy expert Phuc-Vinh Nguyen of Jacques Delors Institute said Russia had earned $71 billion selling oil to EU clients since its February invasion of Ukraine.

Russia's annual defense budget is estimated at $63 billion.

"We can formally agree to the decision," Poland's EU ambassador, Andrzej Sados, told reporters after his country pressed to set a lower price, according to Agence France-Presse (AFP).

The EU presidency, currently held by the Czech Republic, confirmed member state ambassadors had agreed on the price cap and that the decision would enter into force when published in the EU official journal this weekend.

On Friday, the White House also "welcomed" the agreement, and National Security Council spokesman John Kirby told reporters Friday that "the cap itself will have the desired effect on limiting Putin's ability to profit off of oil sales and limit his ability to continue to use that money to fund his war machine."

The EU sanctioned Russian oil traveling by sea beyond the $60 limit to curb the revenue Moscow earns from deliveries to countries such as China or India.

The measure will enhance the effectiveness of the European ban, which comes months after the US and Canada ban.

Russia is the second largest exporter of crude oil in the world. Without setting a ceiling, it will be straightforward for them to reach new buyers at market prices.



Saudi Arabia and Italy Boast Trade Volume of Around $10.9 Billion

Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)
Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)
TT

Saudi Arabia and Italy Boast Trade Volume of Around $10.9 Billion

Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)
Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)

Economic affairs were the key focus of Italian Prime Minister Giorgia Meloni’s visit to Saudi Arabia, which began on Saturday and continues until Monday. During her first official trip to the Kingdom, Meloni aims to strengthen bilateral relations and boost trade ties before heading to Bahrain.

As members of the G20, Saudi Arabia and Italy share mutual economic interests. The establishment of the Saudi-Italian Joint Committee has played a pivotal role in advancing economic, trade, and investment relations between the two countries. It has also created effective governance frameworks to foster collaboration and elevate their relationship to the level of a strategic partnership.

Strategic partnerships

Saudi Arabia is Italy’s second-largest trading partner in the region. In 2023, the trade volume between the two countries reached around $10.8 billion. Saudi imports from Italy were valued at $5.875 billion, while exports to Italy amounted to $4.921 billion, including $737 million in non-oil exports. Globally, Italy ranks as the 10th largest exporter to the Kingdom.

Both nations are working to strengthen economic and investment ties by regularly convening the Saudi-Italian Joint Business Council, increasing official and trade delegation visits, encouraging joint ventures, and organizing trade and investment events.

Currently, more than 150 Italian companies operate in Saudi Arabia, with Italy’s foreign direct investment (FDI) stock in the Kingdom exceeding $4.6 billion.

Renewable energy cooperation

Saudi Arabia and Italy are collaborating in the renewable energy sector as the Kingdom focuses on its transition to carbon neutrality. Italy, with its extensive experience in renewable energy technologies, is seeking to establish a long-term partnership with the Kingdom, a potential future leader in green hydrogen production.

In September 2023, the Saudi-Italian Investment Forum, hosted in Milan by Saudi Arabia’s Ministry of Investment in partnership with Italy’s Ministry of Enterprises and Made in Italy, resulted in the signing of 21 agreements and memorandums of understanding. They covered sectors such as traditional and clean energy, healthcare, real estate, waste management, and more.

According to the Italian government, Italy views Saudi Arabia as a key partner, especially regarding investment opportunities tied to the Kingdom’s Vision 2030. The transformative reform plan aims to diversify the Saudi economy, shifting its reliance from oil to a service-based model. It emphasizes tourism, startups, and small- and medium-sized enterprises (SMEs) in high-value-added sectors.

Saudi Arabia ranks sixth globally in terms of the number of visas issued by Italy, underscoring Italy’s position as a leading destination for Saudi tourists.

Italy is also among the top 20 countries investing in Saudi Arabia, with over 150 Italian companies holding foreign investment licenses in the Kingdom. The Saudi-Italian Investment Forum in 2023 further solidified economic ties, with the signing of 21 agreements spanning a wide range of sectors.