European Union member states on Friday reached agreement on price caps for Russian petroleum products, ahead of an international embargo set to go into force over the weekend, Sweden said.
“EU ambassadors today approved the price caps on petroleum products ahead of final adoption by the European Council (representing EU member states),” tweeted officials from Sweden, which currently holds the rotating EU presidency.
The move is the latest part of an international push to limit Russian President Vladimir Putin’s war chest for his assault on Ukraine by targeting his key exports.
The EU in December imposed an embargo on Russian crude oil coming in by sea and — together with its G7 partners — set a $60-dollar-per-barrel cap for exports around the world.
The second EU-wide embargo, on Russian fuel, is set to come into force on Sunday. It targets Russian refined oil products such as petrol, diesel and heating fuel, arriving on ships.
At the same time, the EU and the G7 group of wealthy democracies have also agreed to impose a price cap on Russian shipments of those products to global markets.
The price caps work by establishing a ceiling for the cost of fuel that can be transported on EU ships.
The Swedish EU presidency said the price caps agreed by the bloc’s members was an “important agreement as part of the continued response by EU and partners to the Russian war of aggression against Ukraine”.
It did not detail the price cap levels for different petroleum products. EU officials were poised to brief media on that later on Friday.
The 27-nation EU had been looking at proposals from the European Commission, its executive arm, to set a $100-per-barrel limit on more expensive products like diesel and $45 on cheaper products like fuel oil.
Diplomats said Poland and the Baltic states, which had the most hawkish stance in the EU on Russia sanctions, pushed for the price to be lowered to further curb Moscow’s income.
But setting the levels is a sensitive issue as the West does not want to cut off Russian supplies to world markets entirely and send global prices soaring.
– Kremlin warns of market ‘imbalance’ –
The Kremlin lashed out at the EU ahead of the embargo coming into force, insisting it will “lead to a further imbalance of the international energy markets”.
“We are taking measures to hedge our interests against the risks associated,” Kremlin spokesman Dmitry Peskov told reporters.
Moscow’s war in Ukraine has provided a harsh wake-up call for the EU, which for years had been reliant on cheap fossil fuels from Russia to power its industries.
Brussels says the embargo on crude oil has seen the bloc cut out some 90 percent of Russian imports, after exceptions were granted for supplies flowing by pipeline to landlocked countries like Hungary.
European Commission president Ursula von der Leyen on Thursday estimated during a visit to Kyiv that the existing price cap on Russian oil was already costing Moscow around 160 million euros ($175 million) every day.