The European Union has decided to withdraw oil products derived from Russian oil from sanctions. This information is published on the official website of the European Commission.
If a Russian petroleum product blends with a product from another country and is processed in a third country, resulting in a different product, the Russian origin can be considered lost and the price ceiling may not apply, according to a statement by a Commission official.
In these cases, the goods carry a different customs code, and European insurers and transporters can handle them without restriction.
Moreover, if petroleum products from Russian oil are substantially transformed outside of Russia, they are not subject to the price caps.
Last summer the European Commission banned the import of Russian oil in its pure form and in blends. However, refined products produced from Russian oil at foreign refineries can still enter the European Union.
According to the International Energy Agency, Russian petroleum product exports reached about 2.85 million barrels per day in 2022, roughly 142 million tons for the year. EU imports accounted for about 1.2 million barrels per day, roughly 40 percent of total EU intake.
oil price ceiling
Since February 5, the European Council has established price limits on Russian petroleum products. Diesel and naphtha sold at prices higher than crude oil relative values are restricted, with a ceiling around 45 dollars per barrel for some products, and higher ceilings, such as for kerosene, around 100 dollars per barrel, when trading above crude levels.
On February 6, the Japanese Ministry of Foreign Affairs announced Tokyo’s participation in measures aimed at containing Russian oil prices.
Russia has stated it will not supply energy resources if these limits remain in place. In January, the Russian government issued a decree describing how it would respond to the oil price ceiling, including monitoring export contracts and restricting exports from Russia if price caps appear on oil deals.
Customs authorities are to notify Russian Railways and Transneft, which move goods affected by the price limit, to prevent raw materials from reaching EAEU countries where they could be diverted to final buyers.
300 million € per day
Josep Borrell, head of EU diplomacy, indicated that Brussels estimates sanctions aimed at Russia will cut energy revenue by about 300 million euros each day. He noted that Russian oil trades at a discount of roughly 40 dollars versus Brent, and projected daily energy revenue to fall from about 800 million euros to around 500 million euros after the latest measures. These figures accompany ongoing reductions in energy dependence on Moscow as the tenth sanctions package is being prepared.
trillion open
In a February 6 update, Russia reported a deficit in the federal budget for January, with revenues down year over year and expenses rising. The ministry highlighted that oil and gas revenues fell sharply, a consequence attributed to lower Urals oil prices and reduced natural gas exports. The government stressed that the fiscal picture remains challenging amid lower energy receipts and shifting export dynamics.
Analysts note that sanctions and price caps have redirected flows and altered trade routes. While the EU continues to tighten measures, it also reassesses how to balance energy security with the goal of limiting Moscow’s revenue from energy exports. Market observers emphasize the importance of transparent reporting and effective enforcement to ensure sanctions achieve their intended impact.