EU council agrees to cap Russian oil price at 60 USD per barrel

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On 3 December, the Council of the European Union decided to set an oil price cap for crude oil and petroleum oils and oils obtained from bituminous minerals which originate in or are exported from Russia, at $60 per barrel. The level of the cap will become applicable as of 5 December 2022.

The adopted decision on the price cap for Russian oil will “limit price surges driven by extraordinary market conditions” and “drastically reduce the revenues Russia has earned from oil after it unleashed its illegal war of aggression against Ukraine,” according to the Council’s press release.

“On 6 October 2022, the Council adopted a decision prohibiting the maritime transport of Russian crude oil (as of 5 December 2022) and petroleum products (as of 5 February 2023) to third countries, and the related provision of technical assistance, brokering services or financing or financial assistance. The Council decision also introduced an exemption from the above-mentioned prohibitions for crude oil or petroleum products which originate in or are exported from Russia, and are purchased at or below a pre-established price cap agreed by the Price Cap Coalition,” the Coucil notes.

It became known that the EU countries agreed on the $60 price cap on 2 December:

EU agrees on Russian oil price cap of $60 per barrel after fraught talks – NYT

The G7 countries and Australia joined the EU decision on the price cap for Russian oil:

G7, Australia join EU in adopting price cap on Russian crude oil

Official Russia rejects the price cap on its oil. Kremlin’s spokesman Dmitry Peskov said Moscow “won’t accept this cap”, according to the RIA news agency. Moscow’s permanent representative to international organizations in Vienna, Mikhail Ulyanov, threatened that “From this year, Europe will live without Russian oil.”

Meanwhile, in his evening address on 3 December, Ukrainian President Volodymyr Zelenskyy criticized the EU-imposed price cap for Russian oil:

“The discussion on price caps, i.e. on limiting the export price of Russian oil, has ended in the world. Unfortunately, without big decisions, as you wouldn’t call it a big decision to set such a limit for Russian prices, which is quite comfortable for the budget of a terrorist state. […]

“The logic is obvious: if the price limit for Russian oil is $60 instead of, for example, $30, which Poland and the Baltic countries talked about, then the Russian budget will receive about a hundred billion dollars a year,” Zelenskyy said.

 

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