European Commission Talks On Oil Price Cap To Cont Next Week

Reuters reporting that EU ambassadors have failed to reach an agreement on a price cap on refined Russian oil products.

• According to EU diplomats, cited by Reuters, the preliminary talks will continue next week ahead of a scheduled Feb 5 implementation date.
• The European Commission proposed on Thursday to implement a USD$100 per barrel cap on premium refined products like diesel and introduce a reduced USD$45 per barrel cap on discounted fuel products.
• Bloomberg reported yesterday that, "heated talks" are expected over 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.”