EU agrees on price caps for Russian refined oil products

BRUSSELS, Feb. 3 (Reuters) – European Union countries agreed to set price caps for Russian refined oil products to limit Moscow’s resources for its invasion of Ukraine, the EU’s Swedish presidency said on Friday.

EU diplomats said the price caps are $100 per barrel for products traded at a higher price than crude oil, mainly diesel, and $45 per barrel for products traded at a discount, such as heating oil and naphtha. Ambassadors from the 27 EU countries have agreed on the European Commission’s proposal, which will take effect from Sunday.

The price caps, along with an EU ban on imports of Russian oil products, are part of a broader agreement between the Group of Seven (G7) countries. It follows a $60-per-barrel cap on Russian crude imposed by G7 countries on December 5 as the G7, EU and Australia seek to limit Moscow’s ability to fund its war in Ukraine.

Both limits prohibit Western insurance, shipping and other companies from financing, insuring, trading, brokering or transporting Russian crude oil and oil products unless they are purchased at or below established price caps.

There will be a 55-day transition period for Russian oil products shipped by sea purchased and loaded before Sunday. The run-down period for Russian crude oil was 45 days.

Poland and the Baltic states of Latvia, Lithuania and Estonia had now pushed for a revision of the crude oil price cap, rather than as planned in mid-March, diplomats said, dragging talks on for days. They want a lower price cap to curb Russian fuel revenues.

For crude oil, regular reviews will set a price cap of at least 5% below the average market price for Russian oil.

Reporting by Philip Blenkinsop, Jan Strupczewski and Sudip Kar-Gupta; edited by Foo Yun Chee, Susan Fenton and Josie Kao

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