EU lowers price cap for Russian oil again

The European Commission (EC) has proposed to lower the oil price cap on Russian crude oil to $44.10/bbl from $47.60/bbl.

IMAGE: Flag of the European Union (EU). Getty Images

The new price cap for Russian crude oil will come into effect on 1 February, the EC said, adding that it will continue to review the price cap every six months.

“The new mechanism ensures that the cap is always 15% lower than the average market price for Urals crude in the previous reference period (22 weeks),” the commission added.

The price cap on Russian oil, implemented by Washington and its allies (the G7 group of countries), are a strategic measure aimed at reducing Russia's export revenue.

This limitation is intended to restrict the financial resources that Russia can allocate towards sustaining its military operations in Ukraine.

EU operators are allowed to provide maritime services for Russian crude oil and other petroleum products “if sold at or below the relevant price caps,” the EC said.

By Aparupa Mazumder

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