The Twenty-Seven have decided this Wednesday to extend until July 23 the maximum price of oil from Russia, set at 44.10 dollars per barrel, while negotiations continue on the points that still block the approval of the twenty-first package of sanctions against Moscow, according to diplomatic sources.
The understanding was reached at a meeting of the Committee of Permanent Representatives (Coreper), which brings together the ambassadors of all Member States and which was held today in Brussels. At the meeting, the capitals agreed on the advisability of maintaining the current ceiling on Russian crude until Thursday, July 23, to gain time and continue finalizing pending issues of the 21st package of punitive measures.
Among the restrictions that remain on the table, the same sources specified, are the economic and technical implications of the proposals put forward by the European Commission, although they did not offer further information on the specific content of these initiatives.
In January, the European Union decided to set a maximum price for Russian oil of 44.10 dollars per barrel, below the market price, in order to cut Moscow's revenues. This limit began to be applied on February 1 and was expected to be reviewed after six months.
Automatic system without the current cap
In the absence of this agreement, a mechanism would be activated that would automatically set a price 15% lower than the market value for crude oil from Russia. With current prices, without the existing cap, Russia could sell its oil to third countries using European services at a price much closer to the market price, which would significantly increase its profit margin.
With the 44.10 dollar limit, Brussels intended to reduce Russia's energy revenues, "a key priority for the EU, with the aim of weakening Moscow's ability to continue its illegal war of aggression against Ukraine," as the Community Executive stressed in a statement released in January.
The G7 Oil Price Cap Coalition launched a system in 2022 to contain the price of Russian crude, which prevents EU operators from providing maritime transport services and related activities for Russian crude oil and petroleum products when they are sold above the corresponding cap.
According to the Commission's explanation, this mechanism was specifically designed to intensify pressure on Russia's oil revenues, while ensuring the stability of global energy markets by maintaining the flow of supply.