Estonia calls for additional measures to cap Russian oil and LNG

The European Union should lower its price cap on Russian crude and also limit the price of liquefied natural gas from the country, according to Estonian Foreign Minister Urmas Reinsalu.

The combined measures would create a “holistic approach to pressure Russia” in the coming weeks, he told reporters in Brussels. 

His comments show that, almost a year after Russia’s invasion of Ukraine, officials are still considering steps to punish Moscow in an effort to bring an end to the conflict. EU sanctions on Russian crude took effect in December. Similar measures on Russian oil products came into place earlier this month. 

The Baltic countries and Poland successfully pushed for a cap of $60 per barrel on Russian crude. The group also secured EU commitments to revisit the limit every two months and to set future caps at least 5% below average market rates. 

Under the price caps, third-country buyers of Russian barrels must stick to the ceiling if they want to use western shipping and insurance services.

The $60 limit is “far too high” and should be lowered to $30, Reinsalu said. “Russia gets billions from that business.” 

The average price of Urals crude, Russia’s key export blend, was $46.82 per barrel between Jan. 15 and Feb. 14, according to the country’s finance ministry.

While Russia has cut pipeline gas flows to Europe to a fraction of their level a year ago, imports of LNG from the nation have increased — with France, Belgium, and Spain being the main buyers. Strong imports from Russia’s Yamal LNG project have also continued. 

Only a handful of nations — Baltic states and the UK — have banned Russian LNG. Germany’s government has sought to reduce Russian LNG imports.