EU agrees oil price cap plan in new Russia sanctions

EU ambassadors today reached an outline agreement on a new sanctions package against Russia over its war with Ukraine, including a price cap on Russian oil, according to seven European diplomats.

The package, which is the 8th round against Moscow, was proposed by European Commission President Ursula von der Leyen last week. A range of EU countries had raised concerns over the new measures, especially on the oil price cap.

The deal was agreed in the room at a meeting of ambassadors on Tuesday. The final version of the text is expected to be approved by ambassadors on Wednesday, the diplomats said, speaking on condition of anonymity because the discussions were private.

The current package provides for the legal basis of the price cap, which was previously agreed by G7 countries. There is no decision yet on the actual price, or the price range, of the future cap.

But Malta, Greece and Cyprus, whose tanker fleets transport most Russian oil, were worried about the impact of the cap on oil prices on their fleets. This led to some concessions toward those countries, according to a draft of the text dated Monday and seen by POLITICO.

For example, the draft mentions a monitoring system by the Commission, which would asses circumvention practices such as the reflagging of vessels. If the Commission finds “significant loss of business” due to these evasive practices, it would “propose measures to mitigate” the impact of these techniques to evade the price cap measure.

The package also aims to hit the Russian steel industry and deprive the Kremlin’s military of key technologies. It includes more measures against individuals assisting Russian President Vladimir Putin’s war effort. It also bans EU nationals from sitting on governing boards of Russian state-owned enterprises.