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EU puts in place oil price cap in its latest package of sanctions against Russia

EU leaders adopted the eighth package of hard-hitting sanctions against Russia for its aggression against Ukraine. It introduces new EU import bans worth 7 billion euros to curb Russia’s revenues, as well as export restrictions, which will further deprive the Kremlin’s military and industrial complex of key components and technologies and Russia’s economy of European services and expertise.

“This new sanctions package against Russia is proof of our determination to stop Putin’s war machine and respond to his latest escalation with fake “referenda” and illegal annexation of Ukrainian territories,” said Josep Borrell, High Representative for Foreign Affairs and Security Policy. “We are further hitting Russia’s war economy, limiting Russia‘s import/export capacities and are on the fast track to liberate ourselves from Russian energy dependence. We are also targeting those responsible for the illegal annexation of Ukrainian territories. The EU will stand by Ukraine for as long as it takes.”

The package marks also the beginning of the implementation within the EU of the G7 agreement on Russian oil exports. It introduces into the EU legislation the basis to put in place a price cap related to the maritime transport of Russian oil for third countries and further restrictions on the maritime transport of crude oil and petroleum products to third countries.

Concretely, it will be prohibited to provide maritime transport and provide technical assistance, brokering services or financing or financial assistance, related to the maritime transport to third countries of crude oil (as of December 2022) or petroleum products (as of February 2023) which originate in or are exported from Russia.

The price cap derogation would allow the provision of the transport and these services if the oil or petroleum products are purchased at or below a pre-established price cap. The price cap will drastically reduce the revenues Russia earns from oil after its illegal war on Ukraine has inflated global energy prices. At the same time, the oil price cap can also serve to keep energy costs stable at a time when high costs – particularly elevated fuel prices – are a great concern to all Europeans.

Tomorrow, EU leaders will meet in Prague to discuss again the three most pressing and interlinked, issues facing the EU, namely Russia’s war in Ukraine, energy and the economic situation. In this context, EU leaders will discuss how to guarantee the security of supply and affordable energy for households and businesses, particularly for the coming winter.

As part of the discussions, they will assess the decisions already taken in this regard, including a set of energy measures to reduce electricity demand and to collect and redistribute the energy sector’s surplus revenues for final consumers, which EU energy ministers reached a political agreement on at the end of September.

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