1 of 3 | President of the European Commission Ursula von der Leyen said talks over a cap on Russian natural gas could be difficult, though policymakers said Tuesday they were upbeat on the prospects. Photo by the European Union/ UPI |
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Dec. 13 (UPI) -- Kicking off December with a price cap and a moratorium on Russian crude oil, policymakers in the European Union as of Tuesday seemed unable to duplicate the feat for natural gas.
Western allies managed to coordinate on a $60 per barrel threshold to provide insurance to shippers carrying Russian crude oil. Urals, one of the Russian benchmarks for the price of crude oil, is trading at a $27-per-barrel discount to Brent, the global benchmark, which was in the low $80-range as of Tuesday.
While pipelines can continue to deliver crude oil to landlocked countries in Europe, the regional economies are no longer permitted to take in waterborne crude oil from Russia. But agreeing on similar measures related to natural gas is proving to be another matter.
"Russia's blackmail has failed," Ursula von der Leyen, the president of the European Commission, the EU's governing body, said Monday. "However, some of our proposals are still under discussion and they are essential for our energy preparedness."
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European Commission President Ursula von der Leyen warned earlier this week that negotiations on a cap on Russian natural gas could be difficult. Photo by European Union/ EP/UPI
Russia long before the February invasion of Ukraine was accused of using energy as a geopolitical weapon in the European economy given its past dependence on Russian resources. Crude oil and natural gas, however, is still flowing and Western allies are working to diminish what goes into the Kremlin's war chest.
Kadri Simson, the energy commissioner for the EU, said on arriving for an emergency meeting of the bloc's Energy Council on Tuesday that the gathering may be one of the most challenging yet.
"We will at least aim for broad agreement on technical parameters and as we all know there are still very different views around the table, so at first we need to see if ministers do have the willingness for compromises," she was quoted in the U.S. political news website Politico as saying.
Austria, Denmark, Germany, Hungary and the Netherlands are stacked up in the 'nay' column against 16 others in the bloc. The price cap has been watered down from around $280 per megawatt-hour for the Dutch benchmark TTF to around $220.
Much of what happens in the European economy, along with the price of natural gas, depends on the weather. The Met Office, the weather reporting agency for the British government, imposed cold-weather alerts for the region as temperatures dip below freezing.
Data on gas storage levels in Europe show capacity is 88% full, though it's closer to 78% for land-locked Hungary.
Despite their differences on the price cap, and varying degrees of preparedness for winter Agnes Pannier-Runacher, the French minister for energy transition, was quoted in CNBC as saying negotiations were moving in the right direction.
"I believe we have started to bring our positions closer," she said.
