The European Union agreed to introduce a price ceiling for Russian oil at $60/bbl.

EU countries agreed on a price ceiling for Russian oil after a week of consultations, the corresponding document was published on December 4 in the official journal of the EU. It is proposed to set the limit at $60/bbl. with subsequent adjustment every two months starting from January 2023. The indicator will be changed so that it is at least 5% lower than the current Urals export price. Vedomosti discussed whether the current restrictions would be an effective lever of pressure on Russian oilmen and how this would affect the global economy.

Russian oil fell under Western sanctions immediately after the start of a special military operation (SVO) in Ukraine. In March, the United Kingdom and the United States announced a complete phase-out of oil from the Russian Federation, the EU embargo on offshore supplies of Russian oil and petroleum products will come into force on December 5, 2022 and February 5, 2023, respectively.

For the first time, the introduction of a ceiling on oil prices from the Russian Federation began to be discussed in the spring of 2022 in order to limit Russia’s revenues against the backdrop of the SVO. On September 2, the finance ministers of the G7 countries (Great Britain, Germany, Italy, Canada, France, Japan and the USA) announced a decision to limit prices for Russian oil and oil products. A joint ministerial statement said the price ceiling “will be set by the buyers’ cartel” and is subject to revision. At the same time, countries that join the cartel will not be able to buy fuel more expensive than the established maximum and insure tankers for its transportation if the price ceiling is not met. It was planned that the restriction of prices for fuel from the Russian Federation would come into force simultaneously with the EU oil embargo. In addition to the EU countries, Australia joined the cartel.