EU, US and UK coordinate on oil price cap

In a move closely coordinated with the G7 nations + Australia (collectively, the ‘Price Cap Coalition’),  the European Union said on 3 December that it had set an oil price cap of $60 ‘for crude oil and petroleum oils and oils obtained from bituminous minerals (CN code 2709 00) which originate in or are exported from Russia.’ The cap became applicable on 5 December 2022.

According to the EU, the cap ‘will limit price surges driven by extraordinary market conditions and drastically reduce the revenues Russia has earned from oil after it unleashed its illegal war of aggression against Ukraine. It will also serve to stabilise global energy prices while mitigating adverse consequences on energy supply to third countries.’

It explained that it had adopted a decision ‘prohibiting the maritime transport of Russian crude oil (as of 5 December 2022) and petroleum products (as of 5 February 2023) to third countries, and the related provision of technical assistance, brokering services or financing or financial assistance,’ and that it had also introduced an ‘exemption…for crude oil or petroleum products which originate in or are exported from Russia, and are purchased at or below a pre-established price cap agreed by the Price Cap Coalition.’

The EU has published an FAQ on the price cap at:

https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_7469

See an OFAC fact sheet on the same at: https://home.treasury.gov/news/press-releases/jy1141