WARSAW — Approval of the tentative deal European Union governments reached on a price cap on Russian seaborne oil is pending as Poland examines the price adjustment mechanism in it, a source familiar with the matter said on Friday.
The deal on a $60 a barrel price cap was approved on Thursday along with an adjustment mechanism to keep the cap at 5% below the market price, according to diplomats and a document seen by Reuters.
Poland has pushed for the price cap to be as low as possible arguing that an overly high level would not hinder Russia’s ability to finance the war against Ukraine. Warsaw also sought a price adjustment mechanism along with a pledge EU would soon enforce another package of sanctions against Moscow.
Poland needs more time for internal consultations on the adjustment mechanism details, specifically those guiding the review of the cap set to take place every two months under the tentative EU deal, the source said.
“Talks are under way,” Aleksander Brzoska, spokesman at the Climate Ministry in Warsaw said on Friday, declining any further comment.
The agreement still needs approval from all EU governments in writing.
The G7 price cap on Russian seaborne crude oil is to kick in on Dec. 5, replacing the harsher EU outright ban on buying Russian seaborne crude, as a way to safeguard global oil supply because Russia produces 10% of the world’s oil. (Reporting by Marek Strzelecki, Editing by Jan Strupczewski and Louise Heavens)