EU, G7, Australia to cap price on Russian oil at $60 per barrel

The Group of Seven (G7) nations, Australia and the European Union have agreed on a $60 per barrel price cap on Russian seaborne crude oil as part of an international campaign to curb Russia’s ability to finance its war against Ukraine through energy sales.

The EU agreed on the price on Friday after holdout Poland gave its support, paving the way for formal approval over the weekend.

The G7 and Australia said in a statement the price cap would take effect on December 5 or very soon thereafter.

“The Price Cap Coalition may also consider further action to ensure the effectiveness of the price cap,” the statement read. No details were immediately available on what further actions could be taken.

The price cap, a G7 idea, aims to reduce Russia’s income from selling oil while preventing a spike in global oil prices after an EU embargo on Russian crude takes effect on Monday (05 Dec).

Poland had resisted the proposed $60 level and had pushed in EU negotiations for the cap to be as low as possible to squeeze revenues to Russia and limit Moscow’s ability to finance the war.

Poland’s EU Ambassador Andrzej Sados told reporters his country had backed the EU deal, which included a mechanism to keep the oil price cap at least 5 percent below the market rate.

US officials said the deal was unprecedented and demonstrated the resolve of the coalition opposing Russia’s war on Ukraine.

After a last-minute flurry of negotiations on Friday, the EU presidency, currently held by the Czech Republic, tweeted that “ambassadors have just reached an agreement on price cap for Russian seaborne #oil”.

- Al Jazeera