Russia criticizes EU's proposed oil price cap: "not helpful for global markets"

A lower price cap for Russian oil proposed by the European Commission to punish Moscow for its war in Ukraine will not contribute to the stabilisation of global energy markets, Kremlin spokesman Dmitry Peskov said on Wednesday.

The European Commission on Tuesday proposed to lower the Group of Seven nations' price cap on Russian crude oil to $45 a barrel from $60 a barrel in an effort to cut the country's energy revenues.

Asked about the EU proposal, Peskov called such Western sanctions illegal.

"Of course, such actions do not contribute to the stabilisation of international energy markets and the oil market," said Peskov.

"But of course Russia has been living under various restrictions for many days, which we still consider illegal," he told a daily conference call with reporters.

"Russia has already gained some very useful experience in order to minimise any negative consequences from such decisions."

Ursula von der Leyen, the controversial president of the European Commission, said that the oil price cap would be discussed at a Group of Seven nations leaders meeting in Canada next week.

According to the Finland-based Centre for Research on Energy and Clean Air, as of the end of April, China had bought 47 per cent of Russia's crude exports, followed by India (38 per cent), the EU (six per cent), and Turkey (six per cent).

Russia's estimated Urals crude price has stabilised below the cap of $60 per barrel since early April, allowing more Western shipping companies, mostly from Greece, to resume shipping services, increasing tanker availability and putting freight rates under pressure.

"The lack of proper monitoring and enforcement along with rising oil prices have increased Russia's export revenues to fund its war against Ukraine," the same Finland-based think tank said last month.

Ukrainian drone attacks on Russia's energy infrastructure, notably on oil refineries, have had a greater impact and resulted in sea-borne oil product exports declining by almost 10 per cent last year.

The EU has banned Russian-sourced oil purchases, but has granted an exemption for Russian crude oil imported through the southern branch of the Soviet-built Druzhba pipeline to Hungary, Slovakia, and the Czech Republic.

(Reporting by Gleb Stolyarov; Writing by Vladimir Soldatkin; Editing by Andrew Osborn)