THE DAILY MAIL
"'Is Washington still our ally?': EU accuses US of PROFITEERING from Ukraine war through sales of guns and gas and threatens trade war - as top diplomats moan Biden's green subsidies mean European businesses are relocating to US"
* European Union officials are accusing the United States of profiting off the Ukraine war with Russia over the price of gas and weapons sold by the US
* One senior European official recently said in an interview with Politico that America is the country 'that is most profiting from this war'
* The frustration comes as Europeans also raise concerns over President Joe Biden's green subsidies, which they say could wreak havoc on EU countries
* The Biden Administration denied the allegations, saying that gas prices have risen due to 'Putin's invasion of Ukraine and Putin's energy war; on Europe
* The Inflation Reduction Act (IRA) and its 'buy American' provisions could kneecap several European countries over the next year
By HOPE SMITH FOR DAILYMAIL.COM
PUBLISHED: 26 November 2022
The EU has accused the US of profiteering from the Ukraine war by selling guns and gas at ramped up prices.
Several high-ranking officials within the Bloc accused Joe Biden of capitalizing on the brutal Russian invasion by marking up the cost to import the vital products.
One senior official told Politico they believe America was standing to gain the most from the continuation of the fighting, nine months after soldiers first invaded.
'The fact is, if you look at it soberly, the country that is most profiting from this war is the U.S. because they are selling more gas and at higher prices, and because they are selling more weapons,' the official said.
In recent months, Europeans have weaned off Russian energy and gas with the countries forced to look to the US for their oil.
EU countries however pay roughly four-times as much for gas as it costs in America, with cheaper energy becoming hugely competitive in the states.
Businesses are looking to pump cash into the US fuel market with new investments - as some even relocate their firms to the other side of the Atlantic.
It has sent some world leaders in Europe into a frenzy, with French President Emmanuel Macron recently saying it was not friendly of the US to treat allies as it is.
Meanwhile European countries are suffering an arms shortage due to huge shipments that have been sent to Ukraine - with them racing to replenish supplies over the winter.
Yet the Americans continue to send more, with the cost of supplying Ukraine to the US now at over $19 billion as another $400 million was added earlier this week.
It comes at an already tumultuous moment between the Americans and several nations as Europe grapples with the fallout from Biden's green subsidies.
'The Inflation Reduction Act has changed everything,' one EU official said.
'Is Washington still our ally or not?'
Tensions came to a boil on Friday as EU trade ministers met and branded the act 'discriminatory', ahead of it coming into force in just over a month.
The nearly $400 billion subsidy 'scheme' introduced in the Inflation Reduction Act incentivizes Americans into buying products that are both U.S. made and energy efficient.
The IRA provides tax credits for businesses and individuals who purchase 'green' products, including wind turbines and elective vehicles.
The credits are mostly available, however, for products made in the United States.
The IRA reportedly sent Brussels into 'full-blown panic mode,' with country officials concerned over the subsidies taking away from EU products and threatening European businesses.
The country recently set up a task force to look into the impact of the IRA on European nations in the coming months and years.
European trade ministers also gathered in Brussels Friday to discuss the IRA, but no concrete solution was found.
Jozef Sikela, the minister for the Czech Republic, recently said he hopes to have a solution before the EU trade ministers meet in early December.
'What is important for us is that the US is aware of our concerns and the task force has to work out a solution which will be acceptable for both parties,' Sikela recently told the Financial Times.
U.S. officials have repeatedly shrugged off the concerns from the European leaders.
At the G20 summit in Bali, EU officials reportedly asked Biden about the high gas prices, to which the American President 'seemed unaware of the issue,' according to the official who spoke with Politico.
'The rise in gas prices in Europe is caused by Putin's invasion of Ukraine and Putin's energy war against Europe, period,' a spokesperson for Biden's National Security Council told the outlet.
The spokesperson also said that the high gas prices impacting the wallets of Europeans is not to be blamed on the U.S. government, but on 'private market decisions.'
'U.S. companies have been transparent and reliable suppliers of natural gas to Europe,' the official said.
Exporting capacity of gasoline has also been capped thanks to a June accident that shut down a facility involved in the trade.
The NSC official also claimed its liquefied natural gas exporters within the EU that are to blame for the high gas prices for Europeans.
'The increase in global LNG supplies, led by the United States, helped European allies and partners get storage levels to an encouraging place ahead of this winter, and we will continue to work with the EU, its members, and other European countries to ensure sufficient supplies will be available for winter and beyond,' the NSC spokesperson said.
It's a line that some European officials say they are not buying, though.
'The United States sells us its gas with a multiplier effect of four when it crosses the Atlantic,' European Commissioner for the Internal Market Thierry Breton recently said.
The nations are also concerned that the U.S. is using its quick and cheap energy practices to seduce businesses into moving from Europe into America.
Solvay, a major chemical multinational corporation, said this week it would move to the U.S. for new investments, an announcement that shocked many.
A Bloomberg article published in June said that for the first time ever, the U.S. was sending the majority of its gas to European nations.
Nearly three-quarters of liquefied gas from the U.S. was sent to Europe in the first four months of the year, energy officials said at the time.
They also said that shipments to the continent had tripled from the same time last year.
The Biden Administration vowed earlier this year to send over more gas as the European nations looked to lean away from the reliance on Russian oil.
That vow, however, came with Americans suppliers who had 'contract flexibility' and were able to deliver more fuel to Europe which then was marked up by European businesses, according to the NSC official.
European nations, now dependent upon the U.S. and its gas supply, say they are fretting over the impacts of the $369 billion green subsidies and what it will look like for them after already being squeezed on gas prices.
'The Inflation Reduction Act is very worrying,' Dutch Trade Minister Liesje Schreinemacher said.
'The potential impact on the European economy is very big.'
'The Europeans are discernibly frustrated about the lack of prior information and consultation,' said David Kleimann with the Bruegel think tank in Brussels.
One transatlantic trade expert also claimed that the policies outright 'discriminate' against friends and allies across the pond.
'The U.S. is following a domestic agenda, which is regrettably protectionist and discriminates against U.S. allies,' said Tonino Picula, who serves as a member of the European Parliament for Croatia.
The nations have called upon the U.S. to consider its allies before letting the policy continue and potentially damage their own industries and economies.
'Americans — our friends — take decisions which have an economic impact on us,' said EU's chief diplomat Josep Borrell.
Borrell, a member of the Spanish Socialist Workers Party, has in the past caught the attention of major media outlets around the world over some of his 'colorful' statements and controversial actions.
Just last month, the diplomat came under fire for calling the world 'a jungle' and Europe a 'garden' that needed to be protected.
Many took the man's comments to be both racist and xenophobic.
In 2018, Borrell was fined 30,000 Euros for insider trading and in 2020, he received harsh criticism after he snapped at whistleblowers who leaked a report about COVID-19 misinformation from the EU.
The diplomat also once said that China is a responsible and reliable partner, unlike the U.S.
While many others have not echoed his exact sentiments, his claims have now been heightened by the ongoing gas dilemma between the U.S. and Europe.
'America needs to realize that public opinion is shifting in many EU countries,' the one EU officials said regarding the trade relationship with the U.S., as well as the continued war between Ukraine and Russia.
'We are really at a historic juncture,' they continued.
President Biden, through an NSC spokesperson, refuted the claims and pleas from the ally nations in a statement, saying: 'While we understand that some trading partners have concerns with how the [electric vehicle] tax credit provisions in the IRA will operate in practice with respect to their producers, we are committed to continuing to work with them to better understand and do what we can to address their concerns.'
'This is not a zero-sum game.'
'The IRA will grow the pie for clean energy investments, not split it,' the spokesperson said.
As the U.S. attempts to move away from traditional fuels and gases, Europeans have become dependent on the export from the Americans
According to Politico, many across the Atlantic are also growing frustrated over the U.S. and its ability to provide weapons and military aid to Ukraine, totaling more than $15 billion alone.
That number is nearly double the €8 billion in aid the EU has sent.
The war has depleted some supplies and it could take years to restock.
This worries the other countries who are concerned the U.S. could seize the opportunity to sell more weapons.
The Pentagon has already announced they are working to develop a plan to speed up sales for military equipment and weapons.
An EU official said that the U.S. is being greedy by making money on both weapons and gas and that tensions may simmer if gas prices were negotiated down.
'It's not good, in terms of optics, to give the impression that your best ally is actually making huge profits out of your troubles,' the EU official said.
The back and forth over gas prices, the green subsidy, and the war itself is exactly what Russian President Vladmir Putin wants, the nations all agreed, however.
In spite of that agreement, many of the European nations are still facing high inflation rates, recession, and possible blackouts heading into winter.
https://www.dailymail.co.uk/news/articl ... apons.html
THE EUROPEANS
Re: THE EUROPEANS
THE CAPE CHARLES MIRROR NOVEMBER 26, 2022 AT 10:02 PM
Paul Plante says:
This is a story about how one out-of-control and out-of-touch-with-reality “world leader” obsessed with wielding raw power like a cudgel or bludgeon can take actions harmful to the world at large that cannot be challenged by anyone being harmed because the obsessed “world leader,” a fool, really, is too powerful, to wit:
Politico
“Europe accuses US of profiting from war – EU officials attack Joe Biden over sky-high gas prices, weapons sales and trade as Vladimir Putin’s war threatens to destroy Western unity.”
By Barbara Moens, Jakob Hanke Vela and Jacopo Barigazzi
November 24, 2022
Top European officials are furious with Joe Biden’s administration and now accuse the Americans of making a fortune from the war, while EU countries suffer.
“The fact is, if you look at it soberly, the country that is most profiting from this war is the U.S. because they are selling more gas and at higher prices, and because they are selling more weapons,” one senior official told POLITICO.
The explosive comments — backed in public and private by officials, diplomats and ministers elsewhere — follow mounting anger in Europe over American subsidies that threaten to wreck European industry.
The biggest point of tension in recent weeks has been Biden’s green subsidies and taxes that Brussels says unfairly tilt trade away from the EU and threaten to destroy European industries.
The growing dispute over Biden’s Inflation Reduction Act (IRA) — a huge tax, climate and health care package — has put fears over a transatlantic trade war high on the political agenda again.
“The Inflation Reduction Act is very worrying,” said Dutch Trade Minister Liesje Schreinemacher.
“The potential impact on the European economy is very big.”
“The U.S. is following a domestic agenda, which is regrettably protectionist and discriminates against U.S. allies,” said Tonino Picula, the European Parliament’s lead person on the transatlantic relationship.
Cheaper energy has quickly become a huge competitive advantage for American companies, too.
Businesses are planning new investments in the U.S. or even relocating their existing businesses away from Europe to American factories.
Just this week, chemical multinational Solvay announced it is choosing the U.S. over Europe for new investments, in the latest of a series of similar announcements from key EU industrial giants.
Despite the energy disagreements, it wasn’t until Washington announced a $369 billion industrial subsidy scheme to support green industries under the Inflation Reduction Act that Brussels went into full-blown panic mode.
“The Inflation Reduction Act has changed everything,” one EU diplomat said.
“Is Washington still our ally or not?”
An official from France’s foreign affairs ministry said the diagnosis is clear: These are “discriminatory subsidies that will distort competition.”
French Economy Minister Bruno Le Maire this week even accused the U.S. of going down China’s path of economic isolationism, urging Brussels to replicate such an approach.
“Europe must not be the last of the Mohicans,” he said.
The EU is preparing its responses, such as a big subsidy push to prevent European industry from being wiped out by American rivals.
“We are experiencing a creeping crisis of trust on trade issues in this relationship,” said German MEP Reinhard Bütikofer.
“At some point, you have to assert yourself,” said French MEP Marie-Pierre Vedrenne.
“We are in a world of power struggles.”
http://www.capecharlesmirror.com/news/o ... ent-723457
Paul Plante says:
This is a story about how one out-of-control and out-of-touch-with-reality “world leader” obsessed with wielding raw power like a cudgel or bludgeon can take actions harmful to the world at large that cannot be challenged by anyone being harmed because the obsessed “world leader,” a fool, really, is too powerful, to wit:
Politico
“Europe accuses US of profiting from war – EU officials attack Joe Biden over sky-high gas prices, weapons sales and trade as Vladimir Putin’s war threatens to destroy Western unity.”
By Barbara Moens, Jakob Hanke Vela and Jacopo Barigazzi
November 24, 2022
Top European officials are furious with Joe Biden’s administration and now accuse the Americans of making a fortune from the war, while EU countries suffer.
“The fact is, if you look at it soberly, the country that is most profiting from this war is the U.S. because they are selling more gas and at higher prices, and because they are selling more weapons,” one senior official told POLITICO.
The explosive comments — backed in public and private by officials, diplomats and ministers elsewhere — follow mounting anger in Europe over American subsidies that threaten to wreck European industry.
The biggest point of tension in recent weeks has been Biden’s green subsidies and taxes that Brussels says unfairly tilt trade away from the EU and threaten to destroy European industries.
The growing dispute over Biden’s Inflation Reduction Act (IRA) — a huge tax, climate and health care package — has put fears over a transatlantic trade war high on the political agenda again.
“The Inflation Reduction Act is very worrying,” said Dutch Trade Minister Liesje Schreinemacher.
“The potential impact on the European economy is very big.”
“The U.S. is following a domestic agenda, which is regrettably protectionist and discriminates against U.S. allies,” said Tonino Picula, the European Parliament’s lead person on the transatlantic relationship.
Cheaper energy has quickly become a huge competitive advantage for American companies, too.
Businesses are planning new investments in the U.S. or even relocating their existing businesses away from Europe to American factories.
Just this week, chemical multinational Solvay announced it is choosing the U.S. over Europe for new investments, in the latest of a series of similar announcements from key EU industrial giants.
Despite the energy disagreements, it wasn’t until Washington announced a $369 billion industrial subsidy scheme to support green industries under the Inflation Reduction Act that Brussels went into full-blown panic mode.
“The Inflation Reduction Act has changed everything,” one EU diplomat said.
“Is Washington still our ally or not?”
An official from France’s foreign affairs ministry said the diagnosis is clear: These are “discriminatory subsidies that will distort competition.”
French Economy Minister Bruno Le Maire this week even accused the U.S. of going down China’s path of economic isolationism, urging Brussels to replicate such an approach.
“Europe must not be the last of the Mohicans,” he said.
The EU is preparing its responses, such as a big subsidy push to prevent European industry from being wiped out by American rivals.
“We are experiencing a creeping crisis of trust on trade issues in this relationship,” said German MEP Reinhard Bütikofer.
“At some point, you have to assert yourself,” said French MEP Marie-Pierre Vedrenne.
“We are in a world of power struggles.”
http://www.capecharlesmirror.com/news/o ... ent-723457
Re: THE EUROPEANS
REUTERS
"EU fails to agree on Russian oil price cap, say diplomats"
By Jan Strupczewski
November 28, 2022
BRUSSELS, Nov 28 (Reuters) - European Union governments failed to agree on Monday on a price cap on Russian seaborne crude oil, as Poland insisted that the cap had to be set lower than proposed by the G7 to cut Moscow's ability to finance its invasion of Ukraine, diplomats said.
"There is no deal."
"The legal texts have now been agreed, but Poland still can't agree to the price," one diplomat said.
No new date for talks has been set yet, diplomats said, even though the price cap mechanism is to enter into force on Dec. 5.
If there was no agreement on the G7 price cap idea by next Monday, the EU would implement harsher measures agreed at the end of May - a ban on all Russian crude oil imports from Dec. 5 and on petroleum products from Feb. 5, Polish diplomats said.
Hungary and two other landlocked central European states secured exemptions from that ban for the pipeline imports they rely on.
The Group of Seven (G7) nations has proposed a softer version of the EU ban to keep oil supply to the global economy steady, because Russia supplies 10% of the world's oil.
It proposed that the EU and other global customers keep buying Russian crude, but only if its price is at or below a G7 agreed level.
That would cut the Kremlin's revenues.
The G7 has proposed a cap of $65-70 per barrel, but Poland and some others argue this will not hurt Moscow because Russian crude is already trading below that range at $63.50 .
With Russian production costs estimated at around $20, Moscow has a very large profit from its oil exports.
Poland, Lithuania and Estonia have been pushing for a price cap of $30 per barrel.
"The Poles are completely uncompromising on the price, without suggesting an acceptable alternative," the EU diplomat said.
"Clearly there is growing annoyance with the Polish position."
Malta, Cyprus and Greece were worried the G7 cap proposal was too low, hitting their large shipping industries, but diplomats said they got some concessions in the legal texts and were no longer an obstacle to a deal.
The idea to enforce the G7 cap is to prohibit shipping, insurance and re-insurance companies from handling cargoes of Russian crude around the globe, unless it is sold for less than the price set by the G7 and its allies.
Because the world's key shipping and insurance firms are based in G7 countries, the price cap would make it very difficult for Moscow to sell its oil for a higher price.
Reporting by Jan Strupczewski; Editing by Alex Richardson
https://www.reuters.com/markets/commodi ... 022-11-28/
"EU fails to agree on Russian oil price cap, say diplomats"
By Jan Strupczewski
November 28, 2022
BRUSSELS, Nov 28 (Reuters) - European Union governments failed to agree on Monday on a price cap on Russian seaborne crude oil, as Poland insisted that the cap had to be set lower than proposed by the G7 to cut Moscow's ability to finance its invasion of Ukraine, diplomats said.
"There is no deal."
"The legal texts have now been agreed, but Poland still can't agree to the price," one diplomat said.
No new date for talks has been set yet, diplomats said, even though the price cap mechanism is to enter into force on Dec. 5.
If there was no agreement on the G7 price cap idea by next Monday, the EU would implement harsher measures agreed at the end of May - a ban on all Russian crude oil imports from Dec. 5 and on petroleum products from Feb. 5, Polish diplomats said.
Hungary and two other landlocked central European states secured exemptions from that ban for the pipeline imports they rely on.
The Group of Seven (G7) nations has proposed a softer version of the EU ban to keep oil supply to the global economy steady, because Russia supplies 10% of the world's oil.
It proposed that the EU and other global customers keep buying Russian crude, but only if its price is at or below a G7 agreed level.
That would cut the Kremlin's revenues.
The G7 has proposed a cap of $65-70 per barrel, but Poland and some others argue this will not hurt Moscow because Russian crude is already trading below that range at $63.50 .
With Russian production costs estimated at around $20, Moscow has a very large profit from its oil exports.
Poland, Lithuania and Estonia have been pushing for a price cap of $30 per barrel.
"The Poles are completely uncompromising on the price, without suggesting an acceptable alternative," the EU diplomat said.
"Clearly there is growing annoyance with the Polish position."
Malta, Cyprus and Greece were worried the G7 cap proposal was too low, hitting their large shipping industries, but diplomats said they got some concessions in the legal texts and were no longer an obstacle to a deal.
The idea to enforce the G7 cap is to prohibit shipping, insurance and re-insurance companies from handling cargoes of Russian crude around the globe, unless it is sold for less than the price set by the G7 and its allies.
Because the world's key shipping and insurance firms are based in G7 countries, the price cap would make it very difficult for Moscow to sell its oil for a higher price.
Reporting by Jan Strupczewski; Editing by Alex Richardson
https://www.reuters.com/markets/commodi ... 022-11-28/
Re: THE EUROPEANS
REUTERS
"Nord Stream updates Russia-Germany pipeline outage end-date to April next year"
Reuters
November 28, 2022
Nov 28 (Reuters) - Nord Stream AG, the operator of the Russia-led Nord Stream 1 gas pipeline, on Monday updated the end date of the unplanned outage at the Greifswald exit in Germany to April 1, next year.
Nord Stream 1 was shut down for repairs on Aug. 31, but never restarted and was subsequently damaged by explosions in September.
Gas flows via the Nord Stream 1 pipeline into the OPAL and NEL connection points in Germany stood at zero, data from the pipeline operator showed.
Reporting by Swati Verma in Bengaluru; Editing by Chris Reese
https://www.reuters.com/business/energy ... 022-11-28/
"Nord Stream updates Russia-Germany pipeline outage end-date to April next year"
Reuters
November 28, 2022
Nov 28 (Reuters) - Nord Stream AG, the operator of the Russia-led Nord Stream 1 gas pipeline, on Monday updated the end date of the unplanned outage at the Greifswald exit in Germany to April 1, next year.
Nord Stream 1 was shut down for repairs on Aug. 31, but never restarted and was subsequently damaged by explosions in September.
Gas flows via the Nord Stream 1 pipeline into the OPAL and NEL connection points in Germany stood at zero, data from the pipeline operator showed.
Reporting by Swati Verma in Bengaluru; Editing by Chris Reese
https://www.reuters.com/business/energy ... 022-11-28/
Re: THE EUROPEANS
REUTERS
"IMF and WTO leaders warn don't 'pull the plug' on global trade"
By Andreas Rinke
November 29, 2022
Nov 29 (Reuters) - The leaders of the International Monetary Fund and the World Trade Organization on Tuesday warned against the negative impact of deglobalization for the global economy, arguing instead for smart moves to diversify supply chains.
IMF Managing Director Kristalina Georgieva, speaking after a meeting with German Chancellor Olaf Scholz, said globalization was facing its biggest challenge since World War Two in the wake of the COVID-19 pandemic and Russia's war in Ukraine.
"But don't throw the baby out with the bathwater," she said.
"Don't pull the plug on trade that makes us all better."
WTO Director-General Ngozi Okonjo-Iweala, speaking at the same news conference, echoed that view, noting a WTO estimate that breaking the global economy into two trading blocs would reduce global gross domestic product by 5% in the longer term.
"Retreating from trade, being protectionist will make it harder - not easier - to solve the problems we have now," Okonjo-Iweala said.
"Protectionism, decoupling, fragmentation is very disruptive and it will be very costly."
Both Okonjo-Iweala and Georgieva said the impact of deglobalization and fragmentation would hit developing countries and emerging markets hardest.
The impact to gross domestic product (GDP) in those countries would be in the double digits, the WTO chief said.
Okonjo-Iweala called for moves to de-concentrate manufacturing in a smart way and warned against counting too heavily on "friend-shoring".
"Who is a friend?"
"A friend today might become very unfriendly tomorrow," she said.
Georgieva said growth was slowing in the United States and China, the world's two largest economies.
She said data pointed to even lower global growth next year than the 2.7% rate the IMF had projected in mid-October.
"Business and consumer sentiment points to weakening of activities in the fourth quarter of this year and continuing in this same direction in 2023," she said.
About one-third of the world economy - and about half of the European Union - would slide in recession in 2023, she said, adding that inflation was now projected to persist longer, although it could gradually decline to around 6.5% next year.
Reporting by Andreas Rinke and Andrea Shalal; Editing by Chris Reese and Lisa Shumaker
https://www.reuters.com/business/imfs-g ... 022-11-29/
"IMF and WTO leaders warn don't 'pull the plug' on global trade"
By Andreas Rinke
November 29, 2022
Nov 29 (Reuters) - The leaders of the International Monetary Fund and the World Trade Organization on Tuesday warned against the negative impact of deglobalization for the global economy, arguing instead for smart moves to diversify supply chains.
IMF Managing Director Kristalina Georgieva, speaking after a meeting with German Chancellor Olaf Scholz, said globalization was facing its biggest challenge since World War Two in the wake of the COVID-19 pandemic and Russia's war in Ukraine.
"But don't throw the baby out with the bathwater," she said.
"Don't pull the plug on trade that makes us all better."
WTO Director-General Ngozi Okonjo-Iweala, speaking at the same news conference, echoed that view, noting a WTO estimate that breaking the global economy into two trading blocs would reduce global gross domestic product by 5% in the longer term.
"Retreating from trade, being protectionist will make it harder - not easier - to solve the problems we have now," Okonjo-Iweala said.
"Protectionism, decoupling, fragmentation is very disruptive and it will be very costly."
Both Okonjo-Iweala and Georgieva said the impact of deglobalization and fragmentation would hit developing countries and emerging markets hardest.
The impact to gross domestic product (GDP) in those countries would be in the double digits, the WTO chief said.
Okonjo-Iweala called for moves to de-concentrate manufacturing in a smart way and warned against counting too heavily on "friend-shoring".
"Who is a friend?"
"A friend today might become very unfriendly tomorrow," she said.
Georgieva said growth was slowing in the United States and China, the world's two largest economies.
She said data pointed to even lower global growth next year than the 2.7% rate the IMF had projected in mid-October.
"Business and consumer sentiment points to weakening of activities in the fourth quarter of this year and continuing in this same direction in 2023," she said.
About one-third of the world economy - and about half of the European Union - would slide in recession in 2023, she said, adding that inflation was now projected to persist longer, although it could gradually decline to around 6.5% next year.
Reporting by Andreas Rinke and Andrea Shalal; Editing by Chris Reese and Lisa Shumaker
https://www.reuters.com/business/imfs-g ... 022-11-29/
Re: THE EUROPEANS
USA TODAY
"Macron, in Washington, slams Biden climate incentives as 'super aggressive' to French firms"
Story by Joey Garrison, USA TODAY
30 NOVEMBER 2022 PM
WASHINGTON — French President Emmanuel Macron, kicking off a three-day state visit in the U.S., raised concerns Wednesday to U.S. lawmakers about Biden administration climate policies giving American companies an unfair advantage in the budding green energy sector.
"This is super aggressive to our business people," Macron said at a luncheon with Congress members and business leaders at the Library of Congress, AFP News Agency reported.
He told lawmakers the policies will "kill a lot of jobs" in Europe unless they are synchronized globally.
The French leader's comments previewed trade talks that are expected to come up during a bilateral meeting Thursday between President Joe Biden and Macron.
Macron's point of contention is Biden's Inflation Reduction Act, which the administration is rolling out after it passed Congress this year.
Biden's signature climate law includes $369 billion to address climate change including billions in incentives to encourage U.S. companies to build electric vehicles, batteries, solar panels and wind turbines.
France and other European Union nations have raised concern that the American-centric policies could exclude European companies from the U.S. green energy market.
"I think that this is not in line with the rules of the World Trade Organization and that it is not in line with friendship," Macron said this month.
The disagreement risks sparking a trade war if the EU were to adopt similar policies boosting European firms.
Takeaways of a brewing trade war
The Inflation Reduction Act stands as one of Biden's most significant legislative accomplishments for ushering in a record level of climate spending.
The president has staked his economic agenda on creating a new era of American jobs through the rapid expansion toward electric vehicles and clean energy.
It's part of a broader goal for the president to compete with China in sectors in which the U.S. trails.
Biden has also pushed to expand the manufacturing of microchips in the U.S. following congressional approval this year of $52 billion in incentives for the semiconductor industry.
Yet the president is finding out that his push for American innovation in the climate sector isn't so popular overseas.
Biden faces a tough task to address the concerns of Macron and other European leaders while keeping the goals of the Inflation Reduction Act intact.
Macron goes to Washington
Macron's meeting on climate and biodiversity with lawmakers included Sens. Chris Coons, D-Del., co-chair of the France Caucus, Joe Manchin, D-W.V., Bill Cassidy, R-La., and James Risch, R-Idaho.
He will meet with congressional leaders of both parties Thursday afternoon at the Capitol.
Macron also met with Vice President Kamala Harris on Wednesday at NASA headquarters in a display of the U.S.-French space partnership that goes back more than 60 years.
Macron's visit marks the first official state dinner in the Biden presidency, but it's not the first time Macron has visited the White House for the pageantry.
In 2018, then-President Donald Trump hosted Macron for his first state dinner.
Biden's meeting with Macron Thursday will be followed by a joint press conference.
The state dinner – a black-tie event that will feature a live performance from singer Jon Batiste – will take place Thursday night.
What they are saying
Macron, addressing the U.S. climate incentives, told lawmakers, "You will perhaps fix your issue, but you will increase my problem," according to AFP News Agency.
He suggested that exceptions for European companies could be written into the law.
Discussing climate change more broadly, Macron said France and the U.S. must "deliver together" and announced a summit in Paris this summer to produce "concrete actions."
John Kirby, coordinator for strategic communications at the National Security Council, said the White House has "every expectation" that the Inflation Reduction Act will come up in the Biden-Macron meeting.
"We welcome that conversation," Kirby said, pointing to a U.S.-EU task force the president assembled to explore European concerns.
"We believe the IRA does historic things to help foster our transition to a clean energy, environment and economy."
"And it's not just a U.S. economic transition."
"It's a global transition."
Harris, speaking alongside Macron at the NASA headquarters, called France a "vital ally."
Regarding space efforts, she said there is "so much potential" to continue to work together.
https://www.msn.com/en-us/news/politics ... d9c5310a01
"Macron, in Washington, slams Biden climate incentives as 'super aggressive' to French firms"
Story by Joey Garrison, USA TODAY
30 NOVEMBER 2022 PM
WASHINGTON — French President Emmanuel Macron, kicking off a three-day state visit in the U.S., raised concerns Wednesday to U.S. lawmakers about Biden administration climate policies giving American companies an unfair advantage in the budding green energy sector.
"This is super aggressive to our business people," Macron said at a luncheon with Congress members and business leaders at the Library of Congress, AFP News Agency reported.
He told lawmakers the policies will "kill a lot of jobs" in Europe unless they are synchronized globally.
The French leader's comments previewed trade talks that are expected to come up during a bilateral meeting Thursday between President Joe Biden and Macron.
Macron's point of contention is Biden's Inflation Reduction Act, which the administration is rolling out after it passed Congress this year.
Biden's signature climate law includes $369 billion to address climate change including billions in incentives to encourage U.S. companies to build electric vehicles, batteries, solar panels and wind turbines.
France and other European Union nations have raised concern that the American-centric policies could exclude European companies from the U.S. green energy market.
"I think that this is not in line with the rules of the World Trade Organization and that it is not in line with friendship," Macron said this month.
The disagreement risks sparking a trade war if the EU were to adopt similar policies boosting European firms.
Takeaways of a brewing trade war
The Inflation Reduction Act stands as one of Biden's most significant legislative accomplishments for ushering in a record level of climate spending.
The president has staked his economic agenda on creating a new era of American jobs through the rapid expansion toward electric vehicles and clean energy.
It's part of a broader goal for the president to compete with China in sectors in which the U.S. trails.
Biden has also pushed to expand the manufacturing of microchips in the U.S. following congressional approval this year of $52 billion in incentives for the semiconductor industry.
Yet the president is finding out that his push for American innovation in the climate sector isn't so popular overseas.
Biden faces a tough task to address the concerns of Macron and other European leaders while keeping the goals of the Inflation Reduction Act intact.
Macron goes to Washington
Macron's meeting on climate and biodiversity with lawmakers included Sens. Chris Coons, D-Del., co-chair of the France Caucus, Joe Manchin, D-W.V., Bill Cassidy, R-La., and James Risch, R-Idaho.
He will meet with congressional leaders of both parties Thursday afternoon at the Capitol.
Macron also met with Vice President Kamala Harris on Wednesday at NASA headquarters in a display of the U.S.-French space partnership that goes back more than 60 years.
Macron's visit marks the first official state dinner in the Biden presidency, but it's not the first time Macron has visited the White House for the pageantry.
In 2018, then-President Donald Trump hosted Macron for his first state dinner.
Biden's meeting with Macron Thursday will be followed by a joint press conference.
The state dinner – a black-tie event that will feature a live performance from singer Jon Batiste – will take place Thursday night.
What they are saying
Macron, addressing the U.S. climate incentives, told lawmakers, "You will perhaps fix your issue, but you will increase my problem," according to AFP News Agency.
He suggested that exceptions for European companies could be written into the law.
Discussing climate change more broadly, Macron said France and the U.S. must "deliver together" and announced a summit in Paris this summer to produce "concrete actions."
John Kirby, coordinator for strategic communications at the National Security Council, said the White House has "every expectation" that the Inflation Reduction Act will come up in the Biden-Macron meeting.
"We welcome that conversation," Kirby said, pointing to a U.S.-EU task force the president assembled to explore European concerns.
"We believe the IRA does historic things to help foster our transition to a clean energy, environment and economy."
"And it's not just a U.S. economic transition."
"It's a global transition."
Harris, speaking alongside Macron at the NASA headquarters, called France a "vital ally."
Regarding space efforts, she said there is "so much potential" to continue to work together.
https://www.msn.com/en-us/news/politics ... d9c5310a01
Re: THE EUROPEANS
REUTERS
"EU agrees $60 Russian oil price cap, holdout Poland backs deal"
By Jan Strupczewski and Kate Abnett
December 2, 2022
Summary
* Poland backs price cap after seeking extra conditions
* EU countries to formally approve the deal this weekend
* G7's price cap aims to cut Russia's oil income
BRUSSELS, Dec 2 (Reuters) - The European Union on Friday agreed on a $60 per barrel price cap on Russian seaborne crude oil, after holdout Poland gave its support, paving the way for formal approval over the weekend.
Warsaw had resisted the proposed level as it examined an adjustment mechanism to keep the cap below the market price.
It had pushed in EU negotiations for the cap to be as low as possible to squeeze revenues to Russia and limit Moscow's ability to finance its war in Ukraine.
Polish Ambassador to the EU Andrzej Sados on Friday told reporters Poland had backed the EU deal, which included a mechanism to keep the oil price cap at least 5% below the market rate.
U.S. officials said the deal was unprecedented and demonstrated the resolve of the coalition opposing Russia's war.
The price cap, an idea of the Group of Seven (G7) nations, aims to reduce Russia's income from selling oil, while preventing a spike in global oil prices after an EU embargo on Russian crude takes effect on Dec. 5.
A spokesperson for the Czech Republic, which holds the rotating EU presidency and oversees EU countries' negotiations, said it had launched the written procedure for all 27 EU countries to formally greenlight the deal, following Poland's approval.
Details of the deal are due to be published in the EU legal journal on Sunday.
EU SEES SIGNIFICANT HIT TO RUSSIAN REVENUES
European Commission President Ursula von der Leyen said the price cap would significantly reduce Russia's revenues.
"It will help us stabilise global energy prices, benefiting emerging economies around the world," von der Leyen said on Twitter, adding that the cap would be "adjustable over time" to react to market developments.
The G7 price cap will allow non-EU countries to continue importing seaborne Russian crude oil, but it will prohibit shipping, insurance and re-insurance companies from handling cargoes of Russian crude around the globe, unless it is sold for less than the price cap.
Because the most important shipping and insurance firms are based in G7 countries, the price cap would make it very difficult for Moscow to sell its oil for a higher price.
The White House on Friday welcomed progress on the cap.
"A price cap will help limit Mr. Putin's ability to profiteer off the oil market so that he can continue to fund a war machine that continues to kill innocent Ukrainians," national security spokesperson John Kirby told reporters.
The U.S. Treasury said it would review the final details once the agreement was finalized.
"This unprecedented action demonstrates the unity of the United States and our allies and partners and we look forward to working with the coalition to quickly finish implementation of the price cap,” Treasury spokesman Michael Gwin said.
The chair of the Russian lower house's foreign affairs committee told Tass news agency on Friday the European Union was jeopardising its own energy security.
The initial G7 proposal last week was for a price cap of $65-$70 per barrel with no adjustment mechanism.
Since Russian Urals crude already traded lower, Poland, Lithuania and Estonia pushed for a lower price.
Russian Urals crude traded at around $67 a barrel on Friday.
EU countries have wrangled for days over the details, with those countries adding conditions to the deal - including that the price cap will be reviewed in mid-January and every two months after that, according to diplomats and an EU document seen by Reuters on Thursday.
The document also said a 45-day transitional period would apply to vessels carrying Russian crude that was loaded before Dec. 5 and unloaded at its final destination by Jan. 19, 2023.
Reporting by Jan Strupczewski, Kate Abnett; additional reporting by Andrea Shalal; editing by Geert De Clercq, Philippa Fletcher, Barbara Lewis and Alistair Bell
https://www.reuters.com/business/energy ... 022-12-02/
"EU agrees $60 Russian oil price cap, holdout Poland backs deal"
By Jan Strupczewski and Kate Abnett
December 2, 2022
Summary
* Poland backs price cap after seeking extra conditions
* EU countries to formally approve the deal this weekend
* G7's price cap aims to cut Russia's oil income
BRUSSELS, Dec 2 (Reuters) - The European Union on Friday agreed on a $60 per barrel price cap on Russian seaborne crude oil, after holdout Poland gave its support, paving the way for formal approval over the weekend.
Warsaw had resisted the proposed level as it examined an adjustment mechanism to keep the cap below the market price.
It had pushed in EU negotiations for the cap to be as low as possible to squeeze revenues to Russia and limit Moscow's ability to finance its war in Ukraine.
Polish Ambassador to the EU Andrzej Sados on Friday told reporters Poland had backed the EU deal, which included a mechanism to keep the oil price cap at least 5% below the market rate.
U.S. officials said the deal was unprecedented and demonstrated the resolve of the coalition opposing Russia's war.
The price cap, an idea of the Group of Seven (G7) nations, aims to reduce Russia's income from selling oil, while preventing a spike in global oil prices after an EU embargo on Russian crude takes effect on Dec. 5.
A spokesperson for the Czech Republic, which holds the rotating EU presidency and oversees EU countries' negotiations, said it had launched the written procedure for all 27 EU countries to formally greenlight the deal, following Poland's approval.
Details of the deal are due to be published in the EU legal journal on Sunday.
EU SEES SIGNIFICANT HIT TO RUSSIAN REVENUES
European Commission President Ursula von der Leyen said the price cap would significantly reduce Russia's revenues.
"It will help us stabilise global energy prices, benefiting emerging economies around the world," von der Leyen said on Twitter, adding that the cap would be "adjustable over time" to react to market developments.
The G7 price cap will allow non-EU countries to continue importing seaborne Russian crude oil, but it will prohibit shipping, insurance and re-insurance companies from handling cargoes of Russian crude around the globe, unless it is sold for less than the price cap.
Because the most important shipping and insurance firms are based in G7 countries, the price cap would make it very difficult for Moscow to sell its oil for a higher price.
The White House on Friday welcomed progress on the cap.
"A price cap will help limit Mr. Putin's ability to profiteer off the oil market so that he can continue to fund a war machine that continues to kill innocent Ukrainians," national security spokesperson John Kirby told reporters.
The U.S. Treasury said it would review the final details once the agreement was finalized.
"This unprecedented action demonstrates the unity of the United States and our allies and partners and we look forward to working with the coalition to quickly finish implementation of the price cap,” Treasury spokesman Michael Gwin said.
The chair of the Russian lower house's foreign affairs committee told Tass news agency on Friday the European Union was jeopardising its own energy security.
The initial G7 proposal last week was for a price cap of $65-$70 per barrel with no adjustment mechanism.
Since Russian Urals crude already traded lower, Poland, Lithuania and Estonia pushed for a lower price.
Russian Urals crude traded at around $67 a barrel on Friday.
EU countries have wrangled for days over the details, with those countries adding conditions to the deal - including that the price cap will be reviewed in mid-January and every two months after that, according to diplomats and an EU document seen by Reuters on Thursday.
The document also said a 45-day transitional period would apply to vessels carrying Russian crude that was loaded before Dec. 5 and unloaded at its final destination by Jan. 19, 2023.
Reporting by Jan Strupczewski, Kate Abnett; additional reporting by Andrea Shalal; editing by Geert De Clercq, Philippa Fletcher, Barbara Lewis and Alistair Bell
https://www.reuters.com/business/energy ... 022-12-02/
Re: THE EUROPEANS
UPI NEWS
"Russia warns it will not sell oil under price cap"
Story by Darryl Coote
5 DECEMBER 2022
Dec. 5 (UPI) -- Russia is warning that it will not sell oil under a price cap, as democratic nations move to limit profits the Kremlin can reap from the sale of its energy commodity amid its war in Ukraine.
Russia Deputy Prime Minister Alexander Novak made the comment Sunday, a day before a European union embargo on seaborne shipments of Russian crude and a price cap of $60 a barrel goes into effect on Monday.
Novak's comments also come after the Group of 7 nations on Friday announced that they along with Australia will enforce the same price cap on Russian-origin oil from Feb. 5, the same day that the EU's embargo expands to refined petroleum products.
"We will sell oil and oil products to those countries, which will work with us on market conditions, even if we have to somewhat cut production," Novak said, state-run TASS news agency reported.
In response to the ally nations, Russia will look to mechanisms to ban price caps on oil sales, Novak said, stating that they violate World Trade Organization rules.
"We think that such interference may entail further destabilization, shortages of energy resources and reduction of investments," he said.
"It may be applied not only to oil but to other products on the market, and not only to Russia but to other countries as well."
The democratic nations have been working for months to initiate a price cap on Russian oil and petroleum products as they seek to punish Russia over its invasion of Ukraine and limit its financial capabilities to continue with its war of aggression.
While $60 a barrel is where the countries landed on, some had sought to further tighten their financial vices with Ukrainian President Volodymyr Zelensky stating in his nightly address over the weekend that it will only be a matter of time before stronger restrictions will need to be employed.
"The logic is obvious: If the price limit for Russian oil is $60 instead of, for example, $30, which Poland and the Baltic countries talked about, then the Russian budget will receive about $100 billion a year," he said.
"This money will go not only to the war and not only to Russia's further sponsoring of other terrorist regimes and organizations."
"This money will also be used to further destabilize precisely those countries that are now trying to avoid big decisions."
https://www.msn.com/en-us/money/markets ... 6a58a7058b
"Russia warns it will not sell oil under price cap"
Story by Darryl Coote
5 DECEMBER 2022
Dec. 5 (UPI) -- Russia is warning that it will not sell oil under a price cap, as democratic nations move to limit profits the Kremlin can reap from the sale of its energy commodity amid its war in Ukraine.
Russia Deputy Prime Minister Alexander Novak made the comment Sunday, a day before a European union embargo on seaborne shipments of Russian crude and a price cap of $60 a barrel goes into effect on Monday.
Novak's comments also come after the Group of 7 nations on Friday announced that they along with Australia will enforce the same price cap on Russian-origin oil from Feb. 5, the same day that the EU's embargo expands to refined petroleum products.
"We will sell oil and oil products to those countries, which will work with us on market conditions, even if we have to somewhat cut production," Novak said, state-run TASS news agency reported.
In response to the ally nations, Russia will look to mechanisms to ban price caps on oil sales, Novak said, stating that they violate World Trade Organization rules.
"We think that such interference may entail further destabilization, shortages of energy resources and reduction of investments," he said.
"It may be applied not only to oil but to other products on the market, and not only to Russia but to other countries as well."
The democratic nations have been working for months to initiate a price cap on Russian oil and petroleum products as they seek to punish Russia over its invasion of Ukraine and limit its financial capabilities to continue with its war of aggression.
While $60 a barrel is where the countries landed on, some had sought to further tighten their financial vices with Ukrainian President Volodymyr Zelensky stating in his nightly address over the weekend that it will only be a matter of time before stronger restrictions will need to be employed.
"The logic is obvious: If the price limit for Russian oil is $60 instead of, for example, $30, which Poland and the Baltic countries talked about, then the Russian budget will receive about $100 billion a year," he said.
"This money will go not only to the war and not only to Russia's further sponsoring of other terrorist regimes and organizations."
"This money will also be used to further destabilize precisely those countries that are now trying to avoid big decisions."
https://www.msn.com/en-us/money/markets ... 6a58a7058b
Re: THE EUROPEANS
REUTERS
"Explainer: Why the U.S. Inflation Reduction Act has Europe up in arms"
By Leigh Thomas
December 5, 2022
PARIS, Dec 5 (Reuters) - Top European Union officials will use a trade meeting with U.S. counterparts on Monday to press concerns about Washington's huge new green energy subsidy package.
While EU countries welcome the new commitment to energy transition, they fear the $430 billion Inflation Reduction Act (IRA) will unfairly disadvantage their companies relative to rivals in the United States.
WHY IS EUROPE ANGRY?
The 27 EU countries are worried their companies will be cut off from U.S. tax credits for components used in renewable energy technologies like electric cars, offered under the new law on condition they are made in North America.
EU countries consider that some 200 billion euros ($207 billion) of the U.S. subsidies are tied to locally produced content provisions that potentially violate World Trade Organization (WTO) rules.
European Commission President Ursula von der Leyen said on Sunday that while competition was a good thing, there should be a level playing field.
Not only do the tax breaks put European companies at a disadvantage to U.S. rivals, but EU state aid rules in their current form prevent member countries from offering similarly generous tax breaks to companies looking to set up factories.
The EU is not Washington's only ally up in arms about the package, with South Korea also concerned its carmakers will not be eligible for the U.S. tax breaks.
WHAT DOES EUROPE WANT?
Since any major revision by the U.S. Congress is out of the picture, European officials say their best hope is to secure exemptions along the same lines as those already granted to Canada and Mexico.
After French President Emmanuel Macron raised concerns last week during a state visit to Washington, U.S. President Joe Biden opened the door to making "tweaks" to the package.
EU governments want a solution quickly, possibly with an arrangement agreed at an EU-U.S. Trade and Technology Council meeting on Dec. 5.
A draft joint statement said ahead of the talks the package was on the agenda.
Although neither side wants to rekindle trade tensions that damaged transatlantic relations during the Trump administration, the head of the European Parliament's trade committee Bernd Lange said a negotiated settlement would only yield small changes, and that Europe should file a complaint at the WTO.
But such a riposte from Europe would be likely to face resistance from traditionally free-trade-friendly nations such as the Netherlands and Sweden.
CAN EUROPE ALSO SUPPORT ITS COMPANIES?
France has led calls for Europe to respond with state support of its own for European companies, including through a "'Buy European' act" and large-scale subsidies.
While not as vocal about the possibility for a massive subsidy programme, Germany has shown interest in supporting European industry, although its coalition-led government is far from united about how to do so.
Meanwhile, some German officials point out that 200 billion euros in EU pandemic recovery funds remain available and could be repurposed to support industry.
European governments can also pool resources to subsidise cross-border projects deemed to be in the broader EU interest, but getting such initiatives approved by the European Commission can often prove long and complicated.
With a number of big projects in the pipeline, French Economy Minister Bruno Le Maire and his German counterpart Robert Habeck last month called on the Commission to streamline and speed up the approval process.
Von der Leyen said that the EU's state aid rules should be adapted in response to the U.S. green subsidy push.
Reporting by Leigh Thomas; Editing by Catherine Evans
https://www.reuters.com/markets/why-us- ... 022-12-05/
"Explainer: Why the U.S. Inflation Reduction Act has Europe up in arms"
By Leigh Thomas
December 5, 2022
PARIS, Dec 5 (Reuters) - Top European Union officials will use a trade meeting with U.S. counterparts on Monday to press concerns about Washington's huge new green energy subsidy package.
While EU countries welcome the new commitment to energy transition, they fear the $430 billion Inflation Reduction Act (IRA) will unfairly disadvantage their companies relative to rivals in the United States.
WHY IS EUROPE ANGRY?
The 27 EU countries are worried their companies will be cut off from U.S. tax credits for components used in renewable energy technologies like electric cars, offered under the new law on condition they are made in North America.
EU countries consider that some 200 billion euros ($207 billion) of the U.S. subsidies are tied to locally produced content provisions that potentially violate World Trade Organization (WTO) rules.
European Commission President Ursula von der Leyen said on Sunday that while competition was a good thing, there should be a level playing field.
Not only do the tax breaks put European companies at a disadvantage to U.S. rivals, but EU state aid rules in their current form prevent member countries from offering similarly generous tax breaks to companies looking to set up factories.
The EU is not Washington's only ally up in arms about the package, with South Korea also concerned its carmakers will not be eligible for the U.S. tax breaks.
WHAT DOES EUROPE WANT?
Since any major revision by the U.S. Congress is out of the picture, European officials say their best hope is to secure exemptions along the same lines as those already granted to Canada and Mexico.
After French President Emmanuel Macron raised concerns last week during a state visit to Washington, U.S. President Joe Biden opened the door to making "tweaks" to the package.
EU governments want a solution quickly, possibly with an arrangement agreed at an EU-U.S. Trade and Technology Council meeting on Dec. 5.
A draft joint statement said ahead of the talks the package was on the agenda.
Although neither side wants to rekindle trade tensions that damaged transatlantic relations during the Trump administration, the head of the European Parliament's trade committee Bernd Lange said a negotiated settlement would only yield small changes, and that Europe should file a complaint at the WTO.
But such a riposte from Europe would be likely to face resistance from traditionally free-trade-friendly nations such as the Netherlands and Sweden.
CAN EUROPE ALSO SUPPORT ITS COMPANIES?
France has led calls for Europe to respond with state support of its own for European companies, including through a "'Buy European' act" and large-scale subsidies.
While not as vocal about the possibility for a massive subsidy programme, Germany has shown interest in supporting European industry, although its coalition-led government is far from united about how to do so.
Meanwhile, some German officials point out that 200 billion euros in EU pandemic recovery funds remain available and could be repurposed to support industry.
European governments can also pool resources to subsidise cross-border projects deemed to be in the broader EU interest, but getting such initiatives approved by the European Commission can often prove long and complicated.
With a number of big projects in the pipeline, French Economy Minister Bruno Le Maire and his German counterpart Robert Habeck last month called on the Commission to streamline and speed up the approval process.
Von der Leyen said that the EU's state aid rules should be adapted in response to the U.S. green subsidy push.
Reporting by Leigh Thomas; Editing by Catherine Evans
https://www.reuters.com/markets/why-us- ... 022-12-05/
Re: THE EUROPEANS
REUTERS
"Analysis: G7 Russian oil price cap evolves from revenue squeeze to market anchor"
By David Lawder and Timothy Gardner
December 6, 2022
WASHINGTON, Dec 6 (Reuters) - When U.S. officials first floated the idea of capping Russian oil export prices in response to a planned European embargo in March, they pledged to squeeze revenues to Russia's war machine, while avoiding a devastating oil price spike.
But keeping Russian oil on the market and global prices low soon became the bigger priority as oil prices jumped, people familiar with the mechanism's evolution and energy analysts said.
The $60-per-barrel price limit on seaborne crude imposed by G7 democracies and Australia on Monday bears that out, lining up with current market prices.
Analysts said the cap will have little immediate impact on the oil revenues that Moscow is currently earning.
Russia said on Monday the cap would not hurt the financing of its "special military operation" in Ukraine.
The price cap is "an unhappy compromise that will do very little to cut Russia's oil revenue" from current levels, said Ben Cahill, an energy security expert at the Center for Strategic and International Studies in Washington.
"I really think that the U.S. Treasury's main objective was to defuse the EU embargo," on Russia's oil exports, Cahill said.
Russia's Urals blend crude for delivery to Europe was quoted at an average price $55.97 on Tuesday, below the cap and down from $61.35 on Sunday.
The benchmark Brent crude price slid to its lowest since January on Tuesday at below $80, extending a downward trend as growing concerns about global demand offset any bullish effects from the price cap on Russian oil sales.
Officials at the U.S. Treasury, the driving force behind the G7 price cap, sought to evenly weigh reducing Russia's revenues and maintaining supply, though market pricing influenced this at times, a senior Treasury official told Reuters.
"There have been times when Brent has fluctuated an enormous amount over the past eight months, where we were worried about one over the other, but in general, we've created these to be the twin goals that have equal importance."
The official said the price cap is "institutionalizing" current market discounts, arguing that the price cap created them.
Analysts also attribute the drop in global oil prices to a weakening global economy, COVID-19 lockdowns in China and the OPEC+ group's decision to maintain steady production.
PRICES, RUSSIAN INCOME DECLINE
At the current price cap level, Russia would earn oil export revenues of about $10 billion to $15 billion a month, said Bob Yawger, director of energy futures at Mizuho in New York.
That is far lower than over $21 billion a month Moscow earned in June, according to an estimate from the International Energy Agency (IEA), as Brent topped $120.
At current oil price cap levels, Russia is earning about the same as it did before talk of a Ukraine invasion started driving prices up.
Russia earned about $15 billion in June and July 2021, before Russian troop buildups near Ukraine.
The $60 price cap level was agreed on Friday after fierce debate.
Poland, Lithuania and Estonia argued that European Union countries should make the cap as low as $30, closer to Russia's production cost, after an initial proposal of $65-70.
FUTURE CASH FLOW
As crude prices have fallen, the language surrounding the price cap from U.S. officials has evolved from "reducing" Russia's revenues, to "limiting," future cash flow.
U.S. Deputy Treasury Secretary Wally Adeyemo told the Reuters NEXT conference in New York on Thursday that the cap "will lead to Russia earning less revenue going forward and having less money to invest in conducting the war."
"The key thing to remember is that we're starting at $60 but we have the ability to...further use the price cap to constrain Russia's revenues over time," Adeyemo said.
In July, Adeyemo said the goal was to eliminate the "risk premium," or price increase that Russia had introduced into the oil market with its invasion of Ukraine, to give Moscow less money to "pay for their war machine."
If Moscow makes good on threats to curtail production rather than sell oil to countries observing the cap, prices could shoot higher, and that is where it could get tricky for the United States and G7 allies.
U.S. officials "want to avoid that at all costs," said Mizuho's Yawger, adding that this could mean that "suddenly support for Ukraine starts to dry up."
PRICE SPIKE AVOIDED
Oil markets have shifted significantly since March when Russia's invasion of Ukraine sent prices soaring.
Internal Treasury estimates around that time had showed that global crude prices could exceed $150 with the EU embargo in place and no mitigating measures.
And with the IEA predicting that oil markets could lose 3 million Russian barrels per day if the most stringent EU sanctions were imposed, Barclays and Rystad Energy warned that oil could hit $200.
Treasury's "true motivation after March has been primarily to preserve Russian flows in the face of EU sanctions, which they don't think were a good idea," said a source briefed on Biden administration discussions.
"They believed if there was an oil price spike, not only will it hurt us economically and politically, but it'll damage Western support for Ukraine," in its fight against Russia's military.
As the G7 formed the plan, India and China have snapped up heavily discounted Russian oil, and are expected to continue big purchases outside the price cap, moves endorsed by Treasury Secretary Janet Yellen.
Reporting by David Lawder and Timothy Gardner; Additional reporting by Noah Browning in London; Editing by Heather Timmons and Marguerita Choy
https://www.reuters.com/business/energy ... 022-12-06/
"Analysis: G7 Russian oil price cap evolves from revenue squeeze to market anchor"
By David Lawder and Timothy Gardner
December 6, 2022
WASHINGTON, Dec 6 (Reuters) - When U.S. officials first floated the idea of capping Russian oil export prices in response to a planned European embargo in March, they pledged to squeeze revenues to Russia's war machine, while avoiding a devastating oil price spike.
But keeping Russian oil on the market and global prices low soon became the bigger priority as oil prices jumped, people familiar with the mechanism's evolution and energy analysts said.
The $60-per-barrel price limit on seaborne crude imposed by G7 democracies and Australia on Monday bears that out, lining up with current market prices.
Analysts said the cap will have little immediate impact on the oil revenues that Moscow is currently earning.
Russia said on Monday the cap would not hurt the financing of its "special military operation" in Ukraine.
The price cap is "an unhappy compromise that will do very little to cut Russia's oil revenue" from current levels, said Ben Cahill, an energy security expert at the Center for Strategic and International Studies in Washington.
"I really think that the U.S. Treasury's main objective was to defuse the EU embargo," on Russia's oil exports, Cahill said.
Russia's Urals blend crude for delivery to Europe was quoted at an average price $55.97 on Tuesday, below the cap and down from $61.35 on Sunday.
The benchmark Brent crude price slid to its lowest since January on Tuesday at below $80, extending a downward trend as growing concerns about global demand offset any bullish effects from the price cap on Russian oil sales.
Officials at the U.S. Treasury, the driving force behind the G7 price cap, sought to evenly weigh reducing Russia's revenues and maintaining supply, though market pricing influenced this at times, a senior Treasury official told Reuters.
"There have been times when Brent has fluctuated an enormous amount over the past eight months, where we were worried about one over the other, but in general, we've created these to be the twin goals that have equal importance."
The official said the price cap is "institutionalizing" current market discounts, arguing that the price cap created them.
Analysts also attribute the drop in global oil prices to a weakening global economy, COVID-19 lockdowns in China and the OPEC+ group's decision to maintain steady production.
PRICES, RUSSIAN INCOME DECLINE
At the current price cap level, Russia would earn oil export revenues of about $10 billion to $15 billion a month, said Bob Yawger, director of energy futures at Mizuho in New York.
That is far lower than over $21 billion a month Moscow earned in June, according to an estimate from the International Energy Agency (IEA), as Brent topped $120.
At current oil price cap levels, Russia is earning about the same as it did before talk of a Ukraine invasion started driving prices up.
Russia earned about $15 billion in June and July 2021, before Russian troop buildups near Ukraine.
The $60 price cap level was agreed on Friday after fierce debate.
Poland, Lithuania and Estonia argued that European Union countries should make the cap as low as $30, closer to Russia's production cost, after an initial proposal of $65-70.
FUTURE CASH FLOW
As crude prices have fallen, the language surrounding the price cap from U.S. officials has evolved from "reducing" Russia's revenues, to "limiting," future cash flow.
U.S. Deputy Treasury Secretary Wally Adeyemo told the Reuters NEXT conference in New York on Thursday that the cap "will lead to Russia earning less revenue going forward and having less money to invest in conducting the war."
"The key thing to remember is that we're starting at $60 but we have the ability to...further use the price cap to constrain Russia's revenues over time," Adeyemo said.
In July, Adeyemo said the goal was to eliminate the "risk premium," or price increase that Russia had introduced into the oil market with its invasion of Ukraine, to give Moscow less money to "pay for their war machine."
If Moscow makes good on threats to curtail production rather than sell oil to countries observing the cap, prices could shoot higher, and that is where it could get tricky for the United States and G7 allies.
U.S. officials "want to avoid that at all costs," said Mizuho's Yawger, adding that this could mean that "suddenly support for Ukraine starts to dry up."
PRICE SPIKE AVOIDED
Oil markets have shifted significantly since March when Russia's invasion of Ukraine sent prices soaring.
Internal Treasury estimates around that time had showed that global crude prices could exceed $150 with the EU embargo in place and no mitigating measures.
And with the IEA predicting that oil markets could lose 3 million Russian barrels per day if the most stringent EU sanctions were imposed, Barclays and Rystad Energy warned that oil could hit $200.
Treasury's "true motivation after March has been primarily to preserve Russian flows in the face of EU sanctions, which they don't think were a good idea," said a source briefed on Biden administration discussions.
"They believed if there was an oil price spike, not only will it hurt us economically and politically, but it'll damage Western support for Ukraine," in its fight against Russia's military.
As the G7 formed the plan, India and China have snapped up heavily discounted Russian oil, and are expected to continue big purchases outside the price cap, moves endorsed by Treasury Secretary Janet Yellen.
Reporting by David Lawder and Timothy Gardner; Additional reporting by Noah Browning in London; Editing by Heather Timmons and Marguerita Choy
https://www.reuters.com/business/energy ... 022-12-06/