The EU has agreed on a maximum price for Russian oil of $60. News headlines and events Last Minute Russia

The European Union has agreed to limit the price of Russian oil transported by sea in the amount of $60 per barrel. The Polish-backed agreement also set the stage for official approval expected over the weekend.

Poland objected to the recommended level, looking into an issuance mechanism to keep the cap below the market price. Warsaw insisted that the upper limit be kept as low as possible in negotiations with the EU in order to cut Russian revenue and limit Moscow’s ability to fund its war in Ukraine.

Poland’s ambassador to the EU, Andrzej Sadosz, told reporters today that Poland supports an agreement with the EU that includes a mechanism to keep the ceiling on oil prices at least 5 percent below the market price.

The application of the cap price, which is the idea of ​​the G7 countries, is aimed at reducing Russia’s oil revenues and preventing the rise in world oil prices after the EU embargo on Russian crude oil came into force on December 5.

The representative of the Czech Republic, which holds the rotating EU presidency and oversees the negotiations of the EU countries, said that after the approval of Poland, they have started a written procedure for all 27 EU countries to formally give the green light to the agreement.

Details of the agreement are expected to be published in the Official Journal of the European Union on Sunday.

“Russia’s revenues will suffer”

Ursula von der Leyen, President of the European Commission, said that the application of the price ceiling would significantly reduce Russia’s revenues.

“This will help us stabilize global energy prices and benefit emerging economies around the world,” von der Leyen tweeted. He noted that “it will adjust over time to respond to market changes.

The G7 price cap will allow non-EU countries to continue importing Russian oil by sea; however, it will ban shipping, insurance and reinsurance companies from worldwide shipping of Russian crude oil unless it is sold below the price ceiling.

Since the most important transport and insurance companies are based in the G7 countries, the price ceiling will make it very difficult for Moscow to sell its oil at a higher price.

White House pleased with progress

The White House welcomed Friday the news that the EU is “unified” on the oil price ceiling, noting that this should cap Russia’s revenues.

“The price ceilings will help limit Putin’s ability to profit from the oil market so that he can continue to fund the war machine that continues to kill innocent Ukrainians,” John Kirby, National Security Council strategic communications coordinator, told reporters.

Russia’s reaction: “The EU threatens its own energy security”

Leonid Slutsky, chairman of the foreign relations committee of the lower house of the Russian parliament, told the TASS news agency that the European Union is jeopardizing its own energy security.

Slutsky argued that this move violated the laws of the market.

The original G7 recommendation last week was for a price cap of $65-70 per barrel without any adjustment mechanism. Poland, Lithuania and Estonia insisted on a lower price, as Russian Ural oil was already trading at a lower price.

Russian Ural oil traded today at about $67 per barrel.

According to diplomats and a leaked EU document yesterday, the countries of the union have been discussing the details for several days and adding terms to the agreement, including a revision of the maximum price in mid-January and every two months thereafter.

The document also states that ships carrying Russian oil loaded before December 5 and unloaded at their final destination before January 19, 2023 will have a 45-day “transition period”.

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