The European Commission is proposing that the EU set a $100 per barrel price cap on premium Russian oil products like diesel and a $45 per barrel cap on discounted products like fuel oil, European Union officials said on Thursday (26 January).
The proposal was sent on Thursday to EU governments and will be discussed by national representatives at a meeting in Brussels on Friday afternoon.
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The aim is to reach an agreement at EU level before the price cap on imported Russian oil products comes into force on 5 February, in line with a decision made by G7 countries.
The price cap on Russian oil products follows a $60 per barrel cap imposed on Russian crude in December as G7 countries and the 27-nation EU as a whole seek to limit Russia’s revenue from its oil exports without disrupting world supply.
The price caps imposed by the G7 – the United States, Canada, Japan, Britain, Italy, France and Germany – and the EU are to curb Moscow’s ability to finance its war in Ukraine.
Both price caps work by prohibiting Western insurance and shipping companies from insuring or carrying cargoes of Russian crude and oil products unless they were bought at or below the set price cap.
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The $60 per barrel limit on crude is now up for review as the market price has been just below the cap.
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