Aerial view of a ship at sea.
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The European Union has reached an agreement on a new sanctions package against Russia, which includes a lower price cap for Moscow’s crude oil barrels.
Within a year of Russia’s 2022 invasion of Ukraine, the G7 and EU restricted the price at which non-G7 countries could continue purchasing Moscow’s crude and oil products while using shipping and logistical services from G7 companies.
The measures aimed to limit Russia’s oil revenues — the backbone of its economy and war coffers — while retaining the country’s supplies in the market to avoid a major shortage.
The price cap agreed in December 2022 banned access to G7 transport, insurance and reinsurance services if non-G7 buyers paid more than $60 per barrel for crude. Formerly a staple of European refiners’ intake, Russian crude now primarily heads to buyers in China and India.
EU policymakers on Friday signaled the Russian oil price threshold would be lowered as part of a newly agreed sanctions package.
“I welcome the agreement on our 18th sanctions package against Russia. We are striking at the heart of Russia’s war machine. Targeting its banking, energy and military-industrial sectors and including a new dynamic oil price cap,” EU Commission President Ursula von der Leyen said on social media.
The EU’s top diplomat Kaja Kallas concurred that a “lower oil price cap” was part of the freshly agreed measures, also noting that the bloc had, for the first time, sanctioned Russian oil producer Rosneft’s largest refinery in India.
Neither official explicitly named the level of the new price cap. CNBC has reached out to Canada, holder of the G7’s yearly rotating presidency in 2025, for comment on whether the group endorses the lowered threshold.
— CNBC’s Silvia Amaro contributed to this report.
This developing story is being updated.
