The countries of the European Union have reached an agreement on a price cap for Russian oil. The Polish government, which has been in trouble for some time, has officially agreed to introduce a price cap of 60 dollars (57 euros) per barrel. Diplomatic sources in Brussels confirm this.
The idea for a price cap comes from the G7 summit. This is a consultative group of seven leading industrial countries that want to tackle Russian revenues from oil exports. The EU participates in G7 consultations with the United States, Canada, Germany, France, Italy, Japan and the United Kingdom. The EU is also a member of the G7.
The European Commission had previously proposed a price cap of 65 to 70 dollars per barrel (of 159 litres) to the 27 EU countries. Poland thought that was too high. Also 62 dollars was still too much for the Poles. The production costs of Russian oil are much lower.
Warsaw wanted to put more pressure on the oil profits that Moscow uses for its attacks on Ukraine, but is now giving up its resistance.
Once the 27 Member States have all signed and the agreement has been published, the price cap will apply. That is expected to be early next week.
The EU itself introduces an import ban
The EU itself will introduce a ban on the import of Russian oil on December 5. The price cap that has now been agreed relates to Russian oil sold elsewhere in the world, for example to China or India.
The price cap imposes restrictions on, for example, insurers of shipping freight. If a ship carries Russian oil traded for more than $60, insurers from the EU or other G7 countries are not allowed to insure the cargo. This should make it more difficult for Russia to sell its oil at a high price. Many insurers and other maritime service providers come from G7 countries.
