A new automatic system for setting the oil price cap on Russian crude will be used for the first time, lowering the cap to $44.10 per barrel from 1 February.
The change follows the EU’s 18th sanctions package, which reduced the previous cap from $60.00 to $47.60 and introduced a “dynamic mechanism” that updates the cap automatically, the European Commission said in a statement on Thursday.
Under the new method, the cap is set at 15% below the average market price for Urals crude — Russia’s main export grade — over the previous 22-week reference period.
Contracts agreed under the old price cap can still be carried out for 90 days from 15 January.
How the price cap works
The oil price cap is part of a G7-backed system introduced in 2022 that limits when EU-based companies can provide shipping and related services for Russian seaborne crude and petroleum products, the Commission said.
EU operators are only allowed to provide maritime transport and related services if the oil is sold at or below the relevant price cap.
The cap will be reviewed every six months, with the option of additional reviews if oil market conditions or other unforeseen events justify it.
