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Russia-Ukraine war live: Russian oil output estimated to fall as G7 commits to price cap


Cap on Russian oil price expanded to G7 and Australia

The G7 and Australia have agreed to cap the price paid for Russian seaborne crude oil at $60 a barrel, hours after EU members overcame internal resistance to reach the same decision earlier in the day.

The EU agreed the price after holdout Poland gave its support, paving the way for formal approval over the weekend.

In a statement, the Group of Seven leading economies and Australia said the price cap would take effect on 5 December or very soon after.

The price cap aims to reduce Russia’s income from selling oil, while preventing a spike in global oil prices after an EU embargo on Russian crude oil takes effect on 5 December.

Poland had pushed in EU negotiations for the cap to be as low as possible in order to squeeze Russian revenues and limit Moscow’s ability to finance its war in Ukraine.

The final deal includes a mechanism to keep the oil price cap at least 5% below the market rate.

US officials said the deal was unprecedented and demonstrated the resolve of the coalition opposing Russia’s war.

The European Commission president, Ursula von der Leyen, said the price cap would significantly reduce Russia’s revenues.

The EU agreement on an oil price cap, coordinated with G7 and others, will reduce Russia’s revenues significantly.

It will help us stabilise global energy prices, benefitting emerging economies around the world. pic.twitter.com/3WmIalIe5y

— Ursula von der Leyen (@vonderleyen) December 2, 2022

Key events

The UK Ministry of Defence has released an update on Russia’s military efforts in Ukraine.

Russian forces continue to invest a large part of their overall firepower on an approximately 15km long sector of entrenched frontline around the Donetsk oblast town of Bakhmut, the defence ministry says.

In recent days, Russia has likely made small advances on the southern axis of this assault and is likely planning to encircle the town.

Russia has prioritised Bakhmut as its main offensive effort since early August 2022. The capture of the town would have limited operational value although it would potentially allow Russia to threaten the larger urban areas of Kramatorsk and Sloviansk.”

The statement from the ministry adds that the campaign has been disproportionately costly, relative to these possible gains.

There is a realistic possibility that Bakhmut’s capture has become primarily a symbolic, political objective for Russia.”

Cap on Russian oil price expanded to G7 and Australia

The G7 and Australia have agreed to cap the price paid for Russian seaborne crude oil at $60 a barrel, hours after EU members overcame internal resistance to reach the same decision earlier in the day.

The EU agreed the price after holdout Poland gave its support, paving the way for formal approval over the weekend.

In a statement, the Group of Seven leading economies and Australia said the price cap would take effect on 5 December or very soon after.

The price cap aims to reduce Russia’s income from selling oil, while preventing a spike in global oil prices after an EU embargo on Russian crude oil takes effect on 5 December.

Poland had pushed in EU negotiations for the cap to be as low as possible in order to squeeze Russian revenues and limit Moscow’s ability to finance its war in Ukraine.

The final deal includes a mechanism to keep the oil price cap at least 5% below the market rate.

US officials said the deal was unprecedented and demonstrated the resolve of the coalition opposing Russia’s war.

The European Commission president, Ursula von der Leyen, said the price cap would significantly reduce Russia’s revenues.

The EU agreement on an oil price cap, coordinated with G7 and others, will reduce Russia’s revenues significantly.

It will help us stabilise global energy prices, benefitting emerging economies around the world. pic.twitter.com/3WmIalIe5y

— Ursula von der Leyen (@vonderleyen) December 2, 2022

Welcome and summary

Hello and welcome to today’s live coverage of the war in Ukraine. My name is Jonathan Yerushalmy and I’ll be with you for the next while.

The G7, EU and Australia have agreed to cap the price of Russian seaborne crude oil at $60 a barrel, in a move that could see Russian oil output fall by 500,000 barrels a day by early 2023.

The decision by the Group of Seven nations and Australia followed an earlier announcement from the EU that the bloc had overcome internal resistance to a $60 a barrel price.

The G7 and Australia said in a statement the price cap would take effect on 5 December or very soon thereafter.

More on this shortly. In the meantime, here are the other key recent developments:

  • The US president, Joe Biden, said on Thursday that he was prepared to speak to the Russian president, Vladimir Putin, if he was looking for a way to end the war but that Putin had not yet indicated that. Putin is open to talks on a possible settlement in Ukraine but the refusal of the United States to recognise annexed territories as Russian is hindering a search for any potential compromise, the Kremlin said.

  • Up to 13,000 Ukrainian soldiers have been killed since Russia invaded in February, according to Kyiv’s presidential adviser Mykhailo Podolyak. At certain points in the war, Ukraine said that between 100 and 200 of its forces were dying a day on the battlefield, making Podolyak’s estimate seem conservative. Speaking to Ukraine’s 24 Kanal, Podolyak said they were official figures from Ukraine’s general staff.

  • Three people were killed and seven wounded in Russian shelling of the southern Ukrainian region of Kherson over the past 24 hours, the regional governor said.

  • Russian-installed authorities in Ukraine’s southern Kherson region said that they would start evacuating some people with reduced mobility from the Russian-occupied town of Kakhovka, on the east bank of the Dnieper River. The evacuations were set to start on Saturday, they said in a Telegram post on Friday.

  • Russian troops in Ukraine are deliberately attacking the country’s museums, libraries and other cultural institutions, according to a report issued by the US and Ukrainian chapters of the international writers’ organisation PEN.

  • The Finnish prime minister, Sanna Marin, has called for Europe to build its own defence capabilities in the wake of the war in Ukraine, saying that without US help Europe is not resilient enough.

  • The International Atomic Energy Agency hopes to reach an agreement with Russia and Ukraine to create a protection zone at the Zaporizhzhia nuclear power plant by the end of the year, the head of the UN atomic watchdog was quoted as saying. The nuclear plant, Europe’s biggest, provided about a fifth of Ukraine’s electricity before Russia’s invasion, and has been forced to operate on backup generators a number of times, Reuters reported.





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