World
Russian oil price cap: Five things you need to know
A worth cap set by the Group of Seven (G7) in addition to an outright ban by the European Union on Russian seaborne oil got here into impact on Monday as the 2 blocs attempt to scale back the Kremlin’s skill to proceed financing the struggle in Ukraine.
On Friday, the G7, EU and Australia agreed to set a restrict on the worth of Russian oil at $60 per barrel. Again in Could, the EU introduced a ban on Russian seaborne crude oil. The 27-member bloc additionally mentioned a ban on imports of refined petroleum merchandise can be enforced from February 5.
The ban covers greater than two-thirds of Russian oil imports coming into the EU, based on European Council President Charles Michel. He referred to this ban as an emblem of EU unity and mentioned in a tweet that it places “most stress on Russia to finish the struggle”.
Whereas the EU’s oil embargo additionally applies to EU operators that insure and finance ships carrying Russian crude oil all over the world, it doesn’t apply to Russian oil imports coming into the bloc by means of pipelines.
The Druzhba oil pipeline, which started working in 1964, has been supplying Russian oil to many Central and Jap European nations, together with Germany, Poland, Hungary, Slovakia, the Czech Republic and Austria.
Germany, Poland and Austria have supported the ban, pledging to utterly wean off Russian oil imports by the tip of this yr.
However Hungary, the Czech Republic, Slovakia and Bulgaria are nonetheless closely depending on Russian pipeline oil and can be allowed to proceed imports quickly till they develop different provides. Nonetheless, these pipeline imports can’t be resold to different EU nations or non-EU nations, based on the European Fee.
Listed below are 5 issues to know in regards to the results of the EU oil import ban and worth cap:
What does the ban and worth cap imply for the oil market within the EU?
Earlier than Russia’s struggle in Ukraine, the 27-member bloc was closely depending on Russian oil exports. In 2021, the EU imported $74.8 billion of crude oil and refined oil merchandise from Russia.
These imports of Russian crude oil amounted to 2.2 million barrels per day, together with 700,000 barrels per day by way of pipelines in addition to 1.2 million of refined oil merchandise, based on the Worldwide Vitality Company (IEA).
With the EU embargoes on Russian sea-borne crude oil coming into drive on Monday and on refined oil merchandise in February, the IEA additionally mentioned the bloc might want to substitute 1 million barrels of crude and 1.1 million barrels of oil merchandise per day.
About 10 p.c of oil imports coming in from the Druzhba oil pipeline will proceed quickly.
Mats Cuvelier, a Brussels-based lawyer specializing in EU and worldwide commerce, informed Al Jazeera that the layered EU ban on Russian oil gained’t have an enormous impact on demand and provide inside the bloc within the quick time period.
“This regulation has been on the books for half a yr already, giving EU nations sufficient time to search out different oil provide routes,” he mentioned. “The bloc has been specializing in changing Russian oil provide routes with routes from nations within the Center East and elsewhere, so the EU gained’t face a crude oil scarcity.”
Philipp Lausberg, an analyst specializing in vitality coverage on the European Coverage Centre, shared an analogous view and highlighted that the principle impact of the oil embargo may very well be an increase in oil costs.
“Brent oil can be dearer, and that’s one thing the EU should put together for,” he informed Al Jazeera.
On the day the worth cap kicked in, international oil costs rose as a lot as 2 p.c.
However Lausberg mentioned a world financial slowdown will scale back international oil demand within the coming months, which can scale back the oil worth as soon as once more.
What does it imply for oil vessels depending on EU funds and insurance coverage?
The EU’s worth cap and ban on oil imports additionally stops EU operators from “insuring and financing the transport, particularly by means of maritime routes, of Russian oil to 3rd nations”.
In response to Lausberg, this can make it significantly tough for Russia to proceed exporting its crude oil and oil merchandise to the remainder of the world.
“Many ships from India, China and different nations are insured by corporations in Europe and the UK,” he mentioned. “These ships at the moment are topic to the EU, G7 and Australia’s guidelines on Russian seaborne crude oil. Russia, nevertheless, has mentioned that their laws doesn’t recognise these guidelines, so how the Kremlin plans to proceed exporting oil to those nations with these new guidelines is but to be seen.”
What does it imply for Russia?
In response to the IEA, Russian oil output is anticipated to fall 1.4 million barrels per day subsequent yr after the EU’s ban on seaborne exports of Russian crude comes into impact.
Cuvelier mentioned Russian vessels may attempt to evade these sanctions by registering within the Marshall Islands or Liberia and eradicating their Russian flags.
“However this tactic is on the EU’s radar, and the bloc has beefed up its maritime safety to make sure Russian vessels don’t evade sanctions on this method,” he mentioned.
In the meantime, Kremlin spokesman Dmitry Peskov mentioned Russia wouldn’t settle for the lately introduced worth ceiling, including that it wanted to analyse the scenario earlier than deciding on a selected response.
Russia’s everlasting consultant to worldwide organisations in Vienna, Mikhail Ulyanov, additionally tweeted, “From this yr, Europe will dwell with out Russian oil.”
“Moscow has already made it clear that it’ll not provide oil to these nations that help anti-market worth caps,” he mentioned. “Wait, very quickly the EU will accuse Russia of utilizing oil as a weapon.”
Russia has choices for the way it may retaliate. “Russia has warned it may utterly ban pipeline oil to the EU, which may very well be difficult for the bloc’s nations depending on this provide route,” Lausberg mentioned.
“Whereas oil provide by means of maritime channels may be simply changed, land-locked nations will discover it arduous to search out another if Russia blocks pipeline oil,” he mentioned.
Will nations that aren’t a part of the foundations be affected?
International locations like India, China and Turkey are additionally depending on Russian oil and proceed to import oil from Moscow.
Vivek Mishra, a fellow on the Observer Analysis Basis in New Delhi, informed Al Jazeera that Russia will almost definitely negotiate with main consumers like India and China and organize foreign money swaps.
“Whereas these mechanisms gained’t have the ability to substitute Russian income from Europe, it is going to definitely create a tender touchdown for Russia,” he mentioned. “I don’t assume India goes to lose a lot as a serious purchaser of Russian oil. If we go by each statements from Russia and India, it factors to the pattern of India shopping for oil from Russia.”
“If something, India may probably negotiate for extra rebates as costs can be capped globally and Russia can be able to lose way more due to lack of associated components reminiscent of insurance coverage corporations not prepared to wager on Russian oil tankers,” he added.
How will the embargo and worth cap have an effect on the worldwide oil market?
OPEC+, a bunch made up of the Group of the Petroleum Exporting International locations and its allies, held a gathering on Sunday to debate how to make sure the oil market isn’t distorted by the brand new guidelines.
It agreed to proceed lowering oil manufacturing by 2 million barrels per day, or about 2 p.c of world demand, till the tip of 2023.
Lausberg defined that each oil producer besides Russia is supposed to profit from these guidelines.
“These sanctions are primarily meant to punish Russia for its actions in Ukraine,” he mentioned.
“But when Russia manages to export extra oil by shopping for extra tankers or utilizing another ways, then how the remainder of the world and the oil market responds is but to be seen.” he mentioned.
World
Spain searches for bodies after unprecedented flooding claims at least 158 lives
Crews searched for bodies in stranded cars and sodden buildings Thursday as residents salvaged what they could from their ruined homes following monstrous flash floods in Spain that claimed at least 158 lives, with 155 deaths confirmed in the eastern Valencia region alone.
More horrors emerged Thursday from the debris and ubiquitous layers of mud left by the walls of water that produced Spain’s deadliest natural disaster in living memory. The damage recalled the aftermath of a tsunami, with survivors left to pick up the pieces as they mourn their loved ones.
AT LEAST 63 DEAD IN DEVASTATING FLASH FLOODS ACROSS EASTERN SPAIN, OFFICIALS SAY
Cars were piled on one another like fallen dominoes, uprooted trees, downed power lines and household items all mired in mud that covered streets in dozens of communities in Valencia, a region south of Barcelona on the Mediterranean coast.
An unknown number of people are still missing and more victims could be found.
“Unfortunately, there are dead people inside some vehicles,” Spain’s Transport Minister Óscar Puente said early Thursday before the death toll spiked from 95 on Wednesday night.
Rushing water turned narrow streets into death traps and spawned rivers that tore through homes and businesses, sweeping away cars, people and everything else in its path. The floods demolished bridges and left roads unrecognizable.
Luís Sánchez, a welder, said he saved several people who were trapped in their cars on the flooded V-31 highway south of Valencia city. The road rapidly became a floating graveyard strewn with hundreds of vehicles.
“I saw bodies floating past. I called out, but nothing,” Sánchez said. “The firefighters took the elderly first, when they could get in. I am from nearby so I tried to help and rescue people. People were crying all over, they were trapped.”
Regional authorities said late Wednesday that rescuers in helicopters saved some 70 people stranded on rooftops and in cars, but ground crews were far from done.
“Our priority is to find the victims and the missing so we can help end the suffering of their families,” Spanish Prime Minister Pedro Sánchez said after meeting with officials and emergency services in Valencia on Thursday, the first of three official days of mourning.
An ‘extraordinary’ deluge
Spain’s Mediterranean coast is used to autumn storms that can cause flooding, but this was the most powerful flash flood event in recent memory. Scientists link it to climate change, which is also behind increasingly high temperatures and droughts in Spain and the heating up of the Mediterranean Sea.
Human-caused climate change has doubled the likelihood of a storm like this week’s deluge in Valencia, according to a rapid but partial analysis Thursday by World Weather Attribution, comprising dozens of international scientists who study global warming’s role in extreme weather.
Spain has been suffering from an almost two-year drought, meaning that when the deluge happened late Tuesday and early Wednesday, the ground was so hard that it could not absorb the rain, leading to flash floods.
The violent weather event surprised regional government officials. Spain’s national weather service said it rained more in eight hours in the Valencian town of Chiva than it had in the preceding 20 months, calling the deluge “extraordinary.”
In Paiporta, a community of 25,000 next to Valencia city where mayor Maribel Albalat said Thursday that not fewer than 62 people had perished.
“(Paiporta) never has floods, we never have this kind of problem. And we found a lot of elderly people in the town center,” Albalat told national broadcaster RTVE. “There were also a lot of people who came to get their cars out of their garages … it was a real trap.’
Farms damaged
While the most suffering was inflicted on municipalities near the city of Valencia, the storms unleashed their fury over huge swaths of the south and eastern coast of the Iberian peninsula. Two fatalities were confirmed in the neighboring Castilla La Mancha region and one in southern Andalusia.
Greenhouses and farms across southern Spain, known as Europe’s garden for its exported produce, were also ruined by heavy rains and flooding. The storms spawned a freak tornado in Valencia and a hail storm that punched holes in cars in Andalusia. Homes were left without water as far southwest as Malaga in Andalusia.
Heavy rains continued Thursday farther north as the Spanish weather agency issued alerts for several counties in Castellón, in the eastern Valencia region, and for Tarragona in Catalonia, as well as southwest Cadiz.
“This storm front is still with us,” the prime minister said. “Stay home and heed the official recommendation and you will help save lives.”
The search goes on amid the destruction
Over 1,000 soldiers from Spain’s emergency rescue units joined regional and local emergency workers in the search for bodies and survivors.
“We are searching house by house,” Ángel Martínez, with a military emergency unit, told Spain’s national radio RNE from the town of Utiel, where at least six people died.
An Associated Press journalist saw rescuers remove seven body bags from an underground garage in Barrio de la Torre on Thursday.
Many residents in both towns had to walk long distances in sticky mud to find food and water. Many of their cars had been destroyed and the mud, destruction and debris left by the storm made some roads unpassable. Some pushed shopping carts along sodden streets while others carried their children to keep them out of the muck.
Valencia regional President Carlos Mazón on Thursday asked if Spain’s army could assist with distributing basic goods to the population.
The National Police arrest 39 people for looting on Wednesday. The Civil Guard deployed officers to stop further thefts from homes, cars and shopping malls.
Some 150,000 people in Valencia were without electricity on Wednesday, but roughly half had power by Thursday, Spanish news agency EFE reported. An unknown number did not have running water and were relying on whatever bottled water they could find.
The region remained partly isolated with several roads cut off and train lines interrupted, including the high-speed service to Madrid. Officials said it will take two to three weeks to repair that damaged line.
A man wept as he showed a reporter from national broadcaster RTVE the shell of what was once the ground floor of his home in Catarroja, south of Valencia. It looked as though a bomb had detonated inside, obliterating furniture and belongings, and stripping the paint off some walls.
World
Orbán's meeting with FPÖ leaders in Vienna sparks controversy
The Hungarian prime minister arrived in Vienna on Thursday, where he was received by parliamentary president Walter Rosenkranz in a meeting condemned by several Austrian political parties.
Despite criticism from other political parties, Austria’s newly elected parliament president, Walter Rosenkranz of the far-right Freedom Party (FPÖ), hosted Hungarian Prime Minister Viktor Orbán in Vienna as his first official guest.
The controversial visit took place in the Austrian parliament’s reception room, with the entire leadership of the FPÖ, including leader Herbert Kickl, reportedly in attendance.
After the meeting concluded, Orbán had a separate, private meeting with Kickl. However, nothing was initially revealed about the content of their conversation.
Rosenkranz said the meeting had been arranged before he took office.
Other Austrian parties, including the Greens and Social Democrats, had resisted Orbán’s visit. Green party parliamentary leader Sigrid Maurer said the FPÖ views Orbán as a role model, which should be considered “an absolute warning signal.”
FPÖ finished first in the recent Austrian parliamentary elections, garnering 29.2% of the vote in the country’s first far-right election win since World War II.
Experts say the party managed to tap into Austrian anxiety on housing and healthcare, as well as often successfully blaming migration for a host of other issues.
As is customary within Austria, the group with the highest number of votes appoints the President of Parliament – hence Rosenkranz being elected to the second-highest state office in the country last week.
Orbán will reportedly not meet with Austrian Chancellor Karl Nehammer during the visit.
Far-right alliance in Europe
Austria’s Freedom Party and Orbán’s Fidesz party both belong to the new European far-right group Patriots for Europe.
The party shares a deep aversion to the Green Deal, EU Commission President Ursula von der Leyen’s flagship initiative to achieve climate neutrality by 2050, and have challenged the project of European integration as well as the power granted to EU institutions.
Patriots for Europe are also opposed to providing Ukraine with military equipment, question the efficiency of Western sanctions against Moscow and want to maintain close relations with Russian President Vladimir Putin and his government.
It is the third-largest group in the European Parliament, boasting dozens of MEPs from countries like France, Italy and the Netherlands.
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