EU discussing Russian oil price cap at $60/barrel with bi-monthly review

Representatives of European Union governments were discussing on Thursday a price cap on Russian seaborne oil at $60 per barrel, with a review every two months, yielding to pressure from some countries to lower the cap, diplomats said.

The Group of Seven nations (G7) proposed last week a price cap on Russian oil, meant to diminish Moscow's revenues and its ability to finance its war in Ukraine, of $65-70 per barrel. The cap, if agreed, is to take effect from Dec 5th.

Poland, Lithuania and Estonia refused to back the cap at that level, arguing Russian Urals crude was already trading lower so the cap would be ineffective.

"The new level under discussion is now $60 per barrel, but talks are continuing," one EU diplomat with knowledge of the discussions said. Two others confirmed the $60 level, noting there was no agreement yet.

The three countries also insist that the price cap be regularly reviewed to adjust to changing market and geopolitical conditions and diplomats said EU government representatives were discussing a review every two months.

Poland, Lithuania and Estonia also want the G7 price cap, which would replace a harsher EU outright ban on buying Russian seaborne crude agreed in May, to be accompanied by a new package of other sanctions against Russia over its invasion of Ukraine.

The sanctions would include adding more Russian individuals to the list of people who cannot enter the EU and whose EU assets would be frozen, banning more Russian state-controlled media outlets from broadcasting in Europe, disconnecting more Russian banks from the global SWIFT payments system, and putting export restrictions on more EU products that Russia could use for both civilian and military purposes.

European Commission head Ursula von der Leyen said last week the EU executive was "working full speed on a ninth sanctions package".