EU member states have agreed on the level of price caps to be imposed on shipments of Russian refined oil products, which will come into effect on Sunday as part of a G7 effort to cut Moscow’s export revenues.
Ambassadors of the 27 EU states agreed at a meeting to limit the price of premium products such as diesel at $100 a barrel and that of low-end products including fuel oil at $45 a barrel.
The caps will allow shipping companies carrying Russian oil products to access western insurance and financing only if they pay less than the prescribed level.
The Swedish rotating presidency of the bloc said the agreement was important as it was “part of the continued response by EU and partners to the Russian war of aggression against Ukraine”.
More hawkish EU states including Poland and the Baltics were successful in demanding a review of the cap level every two months, according to two officials. Other G7 states including the US are less inclined to such a mechanism given the potential instability it could cause on energy markets, officials said.
In the final agreement, ambassadors agreed to a first review by mid-March with the commission considering the impact of the cap both on the Russian budget and member states, according to a draft of the proposal seen by the Financial Times. It would also take account of its effect on the market “including possible turbulences”, the document said.
The cap compares with a current market price for diesel of about $110-$120 a barrel. High-quality refined fuels such as diesel and petrol are almost always more expensive than crude, which is trading near $80 a barrel, given the additional costs of refining and handling.—Financial Times
