Last month, the president of the European Commission, Ursula von der Leyen, proposed that Western countries reduce the price at which Russian oil can be sold to $45 a barrel, down from the current $60.

The price was agreed in 2022, when oil traded at well over $100 a barrel, with the aim of reducing Russia's revenues from fossil fuels. 

The EU's sanctions prohibit member states' merchant vessels from transporting Russian oil if it is sold above the cap.

On Tuesday, Estonian news portal Delfi, citing three sources, reported that Mediterranean countries with large shipping sectors, particularly Malta, want the requirement removed from the package.

As a result, Estonia is considering vetoing the adoption of the 18th package if it does not include the new price cap, Tsahkna said. Decisions in EU foreign policy require unanimous agreement among member states.

"We are in a very clear position that the oil price cap must be part of this package. We have a very strong stance on this," Tsahkna told ERR on Wednesday. He added that lowering the price cap would be the most powerful element of the new sanctions package.

Tsahkna stressed that Estonia's position is to adopt the sanctions package as originally proposed by the European Commission. The government opposes the efforts of some countries to water it down by excluding the new price cap.

He hoped that major EU powers would support Estonia's stance.

$60 cap in place since 2023

The Estonian foreign minister highlighted that the current $60 cap has been in place for several years and has not been lowered because major Western powers have not supported such a move.

However, signs have now emerged that G7 countries are also willing to push the cap on Russian oil even lower.

In addition, signals have come from the United States in recent days indicating a readiness to increase pressure on Russia, which is waging a war of aggression in Ukraine, through new restrictions, Tsahkna noted.

He added that if the sanctions package spearheaded in the U.S. Senate by Lindsey Graham and Richard Blumenthal and the EU's new sanctions package were to be implemented simultaneously, it could place serious pressure on Moscow.

Discussions ongoing

At the same time, the minister stressed that negotiations about the sanctions package are ongoing and no country, including Estonia, has made a final decision.

The next round of talks on imposing new sanctions will take place today in Brussels. Sanctions could be approved next Tuesday at the Foreign Affairs Council meeting.

The price cap on Russian oil means that the European Union bans member states' merchant vessels from transporting Russian oil if it is sold above the cap.

Likewise, EU-based insurers and other service providers are barred from servicing such vessels. The sale of oil and other raw materials is one of the main sources of revenue for Russia to fund its war of aggression in Ukraine.

A $45 price cap would force Russia to sell its oil at a significantly lower rate than global market prices.

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