European Union tentatively agreed on a $60 a barrel price cap on Russian seaborne oil, along with an adjustment mechanism to keep the cap at 5% below the market price.
ccording to Reuters, the agreement still needs approval from all EU governments in a written procedure by December 2. Poland, which had pushed for the cap to be as low as possible, had not confirmed if it would support the deal.
EU countries have been discussing for days the details of the price cap, which aims to cut Russia’s income from selling oil, while at the same time preventing an increase in global oil prices, after an EU embargo on Russian crude takes effect on December 5.
The price cap will allow countries to continue importing Russian crude oil using Western insurance and maritime services, as long as they do not pay more per barrel than the agreed limit.
However, Reuters further adds that the price cap would be reviewed in mid-January and every two months after that, to assess how the scheme is functioning.
In addition, a 45-day “transitional period” would apply to vessels carrying Russian-origin crude oil that was loaded before December 5 and unloaded at its final destination by January 19, 2023.