Today, the European Union and the international G7+ price cap coalition adopted additional price caps for seaborne Russian petroleum products (such a diesel or fuel oil). This will reduce Russia’s ability to wage war against Ukraine and hit Russia’s revenues harder. It will also stabilize global energy markets, which will benefit countries around the globe.
It is in addition to the price limit for crude oil, which has been in effect since December 2022. This will be added to the EU’s complete ban on the import of seaborne crude oil into the European Union.
Ursula von der Leyen was the president of European Commission. She stated: “We’re making Putin pay for his atrocious conflict. Russia is paying a heavy cost as sanctions are eroding Russia’s economy and throwing it back by a generation. We are increasing the pressure by placing additional price caps on Russian oil products. This agreement has been reached with our G7 partners. It will further reduce Putin’s ability to wage war. We aim to have the tenth set of sanctions in place by 24 February, exactly one-year since the invasion began.
Russian petroleum products have two price levels: one for premium-to-crude petroleum products such as gasoline, diesel, kerosene, and kerosene, and another for discount-to-crude petroleum products such as naphtha and fuel oil. This is based on market dynamics. The maximum price of premium-to–crude products is 100 USD per barrel, while the maximum price of discount-to–crude products is 45 USD per bar.
The price cap for petroleum products will go into effect on 5 February 2023. The price cap includes a 55-day wind down period for seaborne Russian petroleum products above the price limit, provided that it is loaded onto a vessel at port of loading before 5 February 2023 and unloaded at final port of destination no later than 1 April 2023.
To ensure that they are effective and have an impact, the price caps for crude oil and petroleum products will be continuously monitored. The price caps will be reviewed periodically and adjusted as necessary.
Today, the European Commission published a guidance document about the implementation of price caps.
Background
The Price Cap Coalition includes Australia, Canada and the EU. It also includes Japan, the UK, and the US.
The EU’s sanctions on Russia have been effective. They have a negative impact on Russia’s ability and potential to repair its weapons, and they also hinder Russia’s transport of material. This has resulted in a reduction in its fossil fuel export revenues. The EU also adopted several sanctions in response to Belarus’s involvement in Russia’s military invasion in Ukraine in 2022.
Russia’s persistent aggression has clear geopolitical and economic implications. The war has caused disruption in global commodity markets, particularly for agrifood and energy. The EU is ensuring that sanctions against Russia do not affect energy or agrifood exports to third countries.
The European Commission, as guardian of EU Treaties monitors the implementation of EU sanctions throughout the EU.
The EU is united in its solidarity for Ukraine and will continue to support Ukraine’s people with international partners. This includes additional financial, political and humanitarian support.
More information
Commission Guidance about the oil price cap
Imports of Oil: Frequently Asked Questions
For more information about EU sanctions
Putin is being made to pay for his atrocious war. Russia is paying a heavy cost as sanctions are eroding Russia’s economy and throwing it back by a generation. We are increasing the pressure by placing additional price caps on Russian oil products. This agreement was reached with our G7 partners. It will further reduce Putin’s ability to wage war. We aim to have the tenth set of sanctions in place by 24 February, exactly one-year since the invasion began. President Ursula von der Leyen – 03/02/2023
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