The European Union sets a $60 ceiling for the price of Russian oil
The Czech Republic, which holds the rotating presidency of the European Union, announced today, Friday, that the European Union countries have reached an agreement to set a maximum price for Russian oil exports to other countries, at $60 per barrel.
Welcoming the agreement, Estonia's Prime Minister Kaya Kallas said on Twitter that "restricting Russia's energy revenue is the key to stopping the Russian war machine."
The price limit, which was approved by the ambassadors of the European Union countries in Brussels today, Friday, is linked to a previous decision by the Group of Seven major countries to impose sanctions on Russian oil exports.
Under the price cap, the provision of certain services to Russian oil shipments, including insurance, financing and technical assistance services, will be prohibited if this oil is sold above $60 a barrel.
A price cap on Russian exported oil aims to limit Russian revenues from energy price increases, and thus restrict Moscow's ability to finance its war on Ukraine.
Russia's Urals crude oil was recently traded, at market prices, at about $65 a barrel.
The price cap means easing tensions in global energy markets and easing the burden on non-European countries.
European diplomats said the price caps would be reviewed every two months.
The price of Russian oil, as published by the International Energy Agency, should be used as a reference.
The maximum prices must remain 5% lower than the reference price.
Callas, who said she was directly involved in the negotiations to reduce the cap by an agreed amount, immediately pressed for a lower cap in the price of Russian oil, in order to reduce Kremlin revenues further.
"Every dollar matters. And every dollar that is negotiated down means $2 billion less in discretionary income for Russia," Callas said in a statement.
To push the cap on oil prices further, Callas said the work is now to act on a ninth package of European sanctions on Russia.
A number of European diplomats said that the consultations will begin this weekend.
The European Union has already supported the G7's decision to impose a global cap on oil as part of the bloc's eighth sanctions package on Russia, which was approved last October.
The United States, Britain, Canada and Japan make up the G7, along with France, Germany and Italy.
Before agreeing on a ceiling for Russian oil export prices, some EU member states called for imposing a much lower ceiling close to the cost of production, with estimates ranging from about $20 to $40 a barrel.
The price cap decision will come into force after it is published in the Official Journal of the European Union.
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