EU close to setting a $60 a barrel price cap on Russian seaborne oil

European Union governments tentatively agreed on Thursday on a $60 a barrel price cap on Russian seaborne oil with an adjustment mechanism to keep the cap at 5% below the market price, an EU diplomat told Reuters.

The decision, which is subject to approval by all EU governments by Friday, is pending an OK from Poland, which had pushed for the cap to be as low as possible. Polish diplomats said consultation with Warsaw was ongoing.

“Poland has until 1600 CET to agree. If it does there will be a written procedure for adoption until tomorrow,” the diplomat said.

The initial G7 proposal last week was for a price cap of $65-70 per barrel with no adjustment mechanism.

Since Russian Urals crude already traded lower, Poland, Lithuania and Estonia rejected that level as not achieving the main objective of cutting Moscow’s revenues and its ability to finance its war in Ukraine.

Photo: REUTERS/Dado Ruvic/Illustration/File Photo