EU nears agreement on lower Russian oil price cap in new sanctions package | Forexlive

European Union diplomats are close to finalising an 18th round of sanctions against Russia, with a key component being a revised, lower price cap on Russian oil, according to four EU sources.

Reuters reporting. In brief:

• While nearly all parts of the package are agreed upon, one member state—reportedly Slovakia—still has technical reservations but is expected to sign off soon.
• proposal includes a dynamic pricing mechanism, with the cap set at 15% below the average global crude price over the past 22 weeks.
• would initially place the cap at around $47 per barrel
• will be reviewed every six months rather than quarterly

Slovakia had delayed the package due to concerns over phasing out Russian gas

• has now agreed in principle

The package also includes:

• A ban on transactions with Russia’s Nord Stream pipelines

• Restrictions on financial networks helping Russia evade sanctions

• New listings including a Russian-owned refinery in India, two Chinese banks, and a flag registry used by Russia’s shadow oil fleet

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The sanctions require unanimous support from all EU members. This effort is part of a broader push by the EU and UK to make the current G7-imposed $60 cap more effective, as falling oil prices have made the existing level less meaningful.

The formal agreement is expected Monday, ahead of a foreign ministers’ meeting on Tuesday in Brussels for approval.