An agreement reached by government representatives on Friday provides for an initial price limit of $60 per barrel, as confirmed by several diplomats from the German news agency.
The price of about 57 euros per 159 liters would then be up to 9 euros below the most recent market price for crude oil from the Russian Urals. According to the plans, it will apply from Monday.
To enforce the price cap, it should be regulated that important services for Russian oil exports may in future 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 shipping Russian oil to third countries such as India. The regulation should also apply to other important services such as insurance, technical assistance, financing and brokerage services.
The hope is that the price cap will ease tensions in 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.
In order to respond to market developments, the plans provide for a bi-monthly review of the price cap. It must always be at least five percent below an average price set by the International Energy Agency (IEA).
The price cap is intended to complement the oil embargo against Russia decided by the EU in June. This includes a ban on the purchase, import or shipment of crude oil and certain petroleum products from Russia to the EU. The restrictions will 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.
(SDA)