EU agrees $60 a barrel price cap on Russian seaborne oil

European Union governments tentatively agreed on Thursday on a $60 a barrel price cap on Russian seaborne oil - an idea of the Group of Seven (G7) nations - with an adjustment mechanism to keep the cap at 5 per cent below the market price, an EU diplomat said.

Poland, which had pushed for the cap to be as low as possible, has until 1500 GMT to agree to the deal, which would need to be approved by all EU governments in a written procedure by Friday, the diplomat said.

The initial G7 proposal last week was for a price cap of $65-70 per barrel with no adjustment mechanism.

Since Russian Urals crude already traded lower, Poland, Lithuania and Estonia rejected that level as not achieving the main objective of cutting Moscow’s revenues and its ability to finance its war in Ukraine.

“The price cap is set at $60 with a provision to keep it 5 per cent below market price for Russian crude, based on IEA figures,” the EU diplomat said. The reviews of the price cap level would be held every two months, EU diplomats said.

“Poland has until 1600 CET to agree. If it does there will be a written procedure for adoption until tomorrow,” the diplomat said.

Because the world’s key shipping and insurance firms are based in G7 countries, the price cap would make it very difficult for Moscow to sell its oil for a higher price.