Twenty-seven EU member states on Thursday tentatively agreed to set a ceiling on the price of Russian crude oil at $60 per barrel.
The G7 and the United States demanded the EU introduce a price cap on Russian crude oil before December 5, when sanctions on Russian maritime transport crude oil were imposed. The introduction of a price ceiling system between EU member states was agreed, but the final agreement was not reached due to differences over the upper limit price.
A revised price of $62 per barrel was recently proposed, but EU member states finally agreed to a tentative price of $60 per barrel on Thursday.They agreed to introduce an additional adjustment mechanism that maintains less than 5% of the Russian crude oil market price evaluated by the International Energy Agency.
They agreed to conduct a review of the upper limit price in mid-January and evaluate the effect of theprice ceiling on the volatility of the crude oil market every two months.
The price cap on Russian crude oil will replace the EU's ban on imports of Russian maritime transportation crude oil, which will take effect on December 5.Petroleum products which were refined in Russia will be excluded from the list.
Meanwhile, the Russian crude oil price ceiling system will be implemented in a way that prohibits the provision of maritime transport services, insurance, and reinsurance services for Russian crude oil above the upper limit price.
Given that major maritime transport and insurance companies are based in G7 member countries, Russia is expected to have difficulty selling crude oil above the upper limit price. Therefore, raising war funds throughoil sales is expected to be impossible.