EU To Debate USD$100/b Cap On Russian Refined Oil Products

The European Commissions has proposed introducing a USD$100 per barrel cap on Russian refined oil products like diesel to be discussed tomorrow ahead of implementation on February 5.

• The precise cap number will be subject to debate at a meeting of the EU ambassadors tomorrow before coming into force on February 5. The EU will require unanimous agreement on the terms of a cap, which will then be signed off on by the G7.
• Bloomberg: “EU diplomats will start discussing the prices levels Friday and heated talks are expected to continue over the next several days, with a group of countries seeking to impose stricter limits on Russian revenues from oil exports and toughen broader EU sanctions on Moscow.”
• As with the price cap on Russian seaborn crude, the cap will be designed to limit Russian revenue whilst allowing EU companies to provide financing and insurance to keep Russian oil products on markets.
• Alan Gelder at Wood Mackenzie: “We would expect Russian crude runs to be largely unaffected by this. Flows will largely continue and it will reduce Russia’s revenue.”