The European Union has agreed to a price ceiling of 60 dollars per barrel for Russian oil shipped by sea, with a mechanism to adjust the ceiling so it can stay about 5 percent below market value.
Ambassadors from 27 EU member states confirmed the cap, with the Czech Republic’s delegation noting on social media that the decision will take effect once published in the EU Official Journal.
The council’s written procedure is formal: approval comes without further debate. The G7 had planned to roll out the measure on Monday, December 5. Earlier, Warsaw’s EU ambassador, Andrzej Sados, suggested the document could be signed over the weekend, emphasizing that the cap includes a provision to tweak the ceiling to keep it roughly 5 percent under current market prices.
Poland helped broker an EU compromise setting the Russian oil price cap at 60 dollars per barrel, opening the door for formal weekend approval. This approach was described by Sadosia as a key step in aligning EU policy with broader sanctions aims.
In September, finance ministers from the Group of Seven (the United Kingdom, Germany, Italy, Canada, the United States, France and Japan) signaled their intent to restrict Russian oil prices. The initial plan targets crude oil by December 5 and refined products by February 5, 2023. Moscow, represented by President Vladimir Putin and Deputy Prime Minister Alexander Novak, has warned it will not supply oil if the policy harms Russia’s interests and suggested Moscow will reject any price limit that interferes with market mechanisms.
Washington’s stance and price regulation
The EU’s deal has already drawn endorsement from Washington. A White House spokesperson welcomed the progress and supported the price cap concept, while noting that the exact details will be set by EU authorities.
Ursula von der Leyen, president of the European Commission, reiterated that a price cap on Russian offshore oil has been agreed and will be actively regulated. She described the move as a way to curb Moscow’s export income while helping stabilize global energy markets, with potential benefits for developing economies. She added that the cap would be adjusted over time as circumstances change.
State Department economist Emily Blanchard described the effort as a coalition action involving the United States, the G7, the EU, and Australia aimed at reducing revenue that could finance Russia’s actions in Ukraine and potentially avert a broader energy crisis. She argued that a 60-dollar ceiling is a practical near-term target and expressed willingness to adjust the cap if needed to meet broader objectives.
Blanchard also indicated that the goal was to extend a ceiling to all Russian oil eventually and to use adjustments as necessary to ensure policy goals are achieved.
Media reporting in October suggested that Washington sees the cap as beneficial for developing countries, with estimates that the measure could spare developing economies roughly 160 billion dollars annually, particularly benefiting major buyers like China and India.
Boundary conditions and industry feedback
Yury Rykov, head of the energy department at the Institute of Energy and Finance, called the 60-dollar limit reasonable for all parties. He noted that the United States initially proposed a 60-dollar floor and that the market price would set a practical baseline. The most critical reaction, according to him, will come from Moscow, and the European Commission’s willingness to grant exceptions will heavily influence outcomes.
Policy limits and enforcement debates
The discussion around caps has persisted since November, with a range of price proposals on the table. Poland reportedly pressed for a 30-dollar cap and viewed the 60-dollar compromise as too high when compared with proposals around 70 dollars from other allies. Reports indicated that Warsaw also pushed for sanctions on the Druzhba pipeline’s northern route through Belarus, seeking legal grounds to terminate contracts and avoid penalties from Russian suppliers.
Overall, the price cap framework aims to limit revenue flows to Moscow while keeping global oil markets stable and accessible. The evolving policy mix will likely see further calibrations as governments monitor compliance, market reactions, and the broader geopolitical environment.