EU countries agree on price caps for Russian oil

Created: 02/12/2022, 19:42

Tanks of Transneft, a Russian state-owned company that operates the country's oil pipelines, at the Ust-Luga oil terminal.

© Stringer/dpa

After lengthy negotiations in Brussels, the EU has agreed on a price cap for Russian oil.

This should be around 60 US dollars per barrel.

Brussels - The EU countries have agreed on the level of a price cap for Russian oil.

In an agreement between government representatives in Brussels on Friday, an

of initially

was set.

This was confirmed by several diplomats from the

.

The aim of the price cap is to force Russia to sell oil below the market price and thus cheaper than it is currently.

Converted, the fixed price cap corresponds to around 57 euros per 159 liters.

It is up to nine euros below the current market price for Russian crude oil of the Uralt variety.

The plan is now to claim the price from Monday.

EU countries plan to limit the price of Russian oil to 60 US dollars 

In order to enforce the price cap, it should be regulated that in future important services for Russian oil exports may only be provided with impunity if the price of the exported oil does not exceed the price cap.

Western shipping companies could use their ships to continue transporting Russian oil to third countries such as India.

The regulation should also apply to other important services such as technical assistance, insurance and financing and brokerage services.

The hope is that the price ceiling will ease the tension on the energy markets and relieve third countries.

In addition, it is also intended to ensure that Russia no longer benefits from rising oil prices and can thus fill its war chest for the Ukraine war.

EU agrees on price cap - a review is planned every two months

According to the plans, the price cap should be reviewed about every two months in order to be able to react to market developments.

It should always be at least five percent below an average price determined by the International Energy Agency (IEA).

The agreement of the EU states on a price cap is intended to supplement the oil embargo against Russia that the EU decided in June.

Among other things, this provides for a ban on the purchase, import or forwarding of crude oil and certain petroleum products from Russia to the EU.

The restrictions apply from December 5 for crude oil and from February 5, 2023 for other petroleum products.

However, there are some exceptions, for example for Hungary.