EU agrees to cap Russia’s oil prices

They finally agreed. The 27 countries of the European Union reached an agreement on Friday, December 2, to cap the price of Russian oil at $60 a barrel, which would deprive Moscow of the means to finance its war in Ukraine. The deal, signed on Thursday by diplomats from EU member states, was coordinated with their G7 allies on the file and suspended from Poland’s end, which gave the green light on Friday evening.

“The EU stands united and stands in solidarity with Ukraine”, welcomed the Czech Presidency of the Council of the European Union. The proposed mechanism plans to impose a $60-a-barrel ceiling on the price of Russian oil sold to third countries, in addition to the EU ban that comes into force on Monday. Phuc-Vinh Nguyen, an expert on energy issues at the Jacques-Delors Institute, recalled that Russia has earned 67 billion euros from its oil sales to the EU since the start of the war in Ukraine.

Russia is the world’s second largest exporter of crude oil

The EU system should ban services that allow maritime transport of Russian oil (freight, insurance, etc.) beyond the $60 ceiling, limiting Moscow’s revenue by giving it to countries like China or India. The instrument should strengthen the effectiveness of the European ban, which intervenes several months after the US and Canada have already decided.

Russia is the world’s second largest crude exporter and without this cap it would be much easier to supply new buyers at market prices. Currently, the G7 countries provide insurance services for 90% of global cargo, and the EU plays a major role in maritime cargo, resulting in reliable prevention, but also the risk of losing markets to the benefit of competitors.