EU embargo on Russian oil shipments, price cap mechanism come into force

EU embargo on Russian oil shipments, price cap mechanism come into force

On Monday, the EU’s embargo on Russian oil shipped by sea comes into effect, under which Europe will officially stop importing seaborne Russian oil and will try to introduce an oil price cap at $60 per barrel for countries not party to the deal.

Separately, the European Union, the G7 and Australia will enact a ban on shipping and insurance of Russian oil that costs more than $60 or at least 5% below the market price.

In its turn, Russia is not planning to export its crude under the terms envisaged by the oil price cap, while experts do not rule out that oil prices will exceed $100.

Back in June, the EU agreed its sixth package of sanctions against Russia, including a ban on Russian oil imports by sea from December 5 and refined oil products from February 5. The Russian oil price cap was announced by G7 foreign ministers in September. Bulgaria will be able to receive seaborne oil and petroleum products from Russia until the end of 2024, and Croatia will buy Russian gas oil through late 2023.

However, Bulgaria has been exempted and is permitted to import Russian crude by sea.

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