EU delays Russian oil price cap cut amid Middle East conflict
European Commission to propose floating price cap on Russian oil (Getty Images)
The European Commission will propose a floating price cap on Russian oil this week as part of a new sanctions package, in an effort to overcome resistance from some EU member states, Reuters reports.
Four EU sources told the agency that the European Commission is developing a mechanism to adjust the price cap on Russian oil based on changes in global oil prices.
This initiative aims to overcome the resistance of some EU countries that are blocking the 18th package of sanctions against Russia.
It is noted that the mechanism is still under review and would involve a more automated process for adjusting the price cap in line with global crude oil prices.
According to one of the sources, it is unclear what the exact limit will be, but the starting point is expected to be slightly above $45 per barrel.
Price cap on Russian oil
As of now, the price cap on Russian oil remains set at $60 per barrel.
In June, the European Commission introduced a new sanctions package against Russia, proposing to lower the cap to $45 per barrel.
Recently, Bloomberg reported, citing sources, that the United States opposes introducing a new price limit on Russian oil. However, the idea has not been entirely ruled out, as the final decision depends on President Donald Trump.
Later, media outlets reported that the EU postponed plans to implement the new cap, citing concerns that the emerging conflict in the Middle East could drive up global oil prices.
Additionally, it was recently revealed that Estonia may block the EU's 18th sanctions package against Russia if the provision to lower the oil price cap is removed.
