The measure will enter into force upon publication in the Official Journal of the European Union
Ambassadors from EU member states have just joined Coreper an agreement to cap the price of Russian oil shipped to third countries. The presidency announces it. Two sources confirm that the level set for Urals Oil, Russia’s reference crude for exports, is $60 a barrel (yesterday it traded just above $64, according to OilPrice.com). Urals is a lower quality oil than Brent, the North Sea crude which is the European benchmark, so it usually prices below the latter.
The spread with respect to Brent has been widening since the invasion of Ukraine as a result of Western sanctions, which alienated many buyers, making it cheaper because it is less in demand on the market. Russian oil is still being sold to several countries, including India: last October Moscow became the subcontinent’s top crude supplier, overtaking countries that traditionally supply Delhi, such as Saudi Arabia and Qatar. The cap should be implemented by leveraging EU-based shipping, insurance and reinsurance companies, which will not be able to transport, insure or reinsure Russian crude destined for non-EU countries if sold at a higher price. The written procedure now begins: the measure will enter into force upon publication in the EU Official Journal. “The EU is united and alongside Ukraine”, assures the Czech presidency via social media.