EU agrees price caps on Russian oil products

EU countries agreed on Friday on a European Commission proposal to set price caps on Russian refined oil products, the Swedish presidency of the European Union said.

EU diplomats said the price caps agreed by ambassadors for the 27 EU countries are $100 per barrel on products that trade at a premium to crude, such as diesel, and $45 per barrel for products that trade at a discount, such as fuel oil. The proposal is that they apply from Sunday.

Poland and Baltic states Latvia, Lithuania and Estonia had pushed for the caps to be set at lower levels to curb Russia’s revenues from fuel, diplomats had said, dragging on talks for days.

The price caps, together with an EU ban on Russian oil product imports, are part of a broader agreement among the Group of Seven (G7) countries. It follows a $60 per barrel cap imposed on Russian crude on Dec. 5 as G7 countries, the EU and Australia seek to limit Moscow’s ability to fund its war in Ukraine.

Both 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.