Europe imposed a ban Sunday on Russian diesel fuel and other refined oil products, slashing energy dependency on Moscow and seeking to further crimp the Kremlin's fossil fuel earnings as punishment for invading Ukraine .
“Once we have these price caps set, we can squeeze the Russian price and deny them, deny Putin money for his war without a price spike that’s going to hurt Western economies and developing economies,” saidThe diesel price cap will not bite immediately because it was set at about what Russian diesel trades for. Russia’s chief problem now will be finding new customers, not evading the price ceiling. However, theAnalysts say there might be a price bump initially as markets sort out the changes.
Diesel fuel at the pump has been flat since the start of December, costing 1.80 euros per liter as of Jan. 30, according to the weekly oil market report issued by the European Union’s executive commission. Pump prices in Germany, the EU’s largest economy, fell 2.6 cents to 1.83 euros per liter as of Jan. 31.
The ban provides for a 55-day grace period for diesel loaded on tankers before Sunday, a step aimed at avoiding ruffling markets. European Union officials say importers have had time to adjust since the ban was announced in June.Russia earned more than $2 billion from diesel sales to Europe in December alone as importers appear to have stocked up with added purchases ahead of the ban.
Europe has already banned Russian coal and most crude oil, while Moscow has cut off most shipments of natural gas.
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