EU Sets Price Caps for Russian Oil Products
The EU set two price caps for oil products exported from Russia under commodity code 2710, the European Council announced Feb. 4. The caps apply to petroleum products exempt from the bloc's ban on maritime transport of oil products to third countries from Russia and on related technical assistance, brokering services or financing or financial assistance.
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Caps are set at $45 per barrel for oil products traded at a discount to crude oil and $100 per barrel for petroleum products traded at a premium to crude, the council said. The caps took effect Feb. 5, after which a 55-day transitional period applies for vessels carrying Russian oil products bought and loaded before Feb. 5 and unloaded before April 1. The council will review the price cap mechanism for crude in mid-March and regularly review the cap every two months.
The ban on Russian oil and related price caps won't prevent Russian oil from entering the EU, though, given the inherent gaps in the restrictions, Bloomberg reported. Various legal ways to circumvent the ban will maintain oil flows into the bloc, and places such India will increase their operations to process Russian crude then send the finished good to Europe as non-Russian diesel, Bloomberg said. The publication cited data showing Russia plans to export around 730,000 barrels a day of diesel from key Western ports in February -- the biggest flow since at least the start of 2020.