The European Commission proposed on Friday a floating price cap on Russian oil of 15% below the average market price of crude in the previous three months, EU diplomats said.
The European Union and Britain have been pushing the Group of Seven nations to lower the cap for the last two months after a fall in oil futures made the current $60 a barrel level largely irrelevant. Brent crude has since rebounded somewhat, and settled on Friday at $70.36 per barrel.
The G7 price cap, aimed at curbing Russia’s ability to finance the war in Ukraine, was originally agreed in December 2022.
The new floating cap would be revised according to the average price every three months, one of the diplomats added.
The EU diplomats, who were not authorized to speak publicly, said technical details of the latest proposal still needed to be discussed, but the idea seemed to assuage concerns of the EU’s maritime states – Malta, Greece and Cyprus.
Despite repeated attempts from European leaders, the U.S. administration has not agreed to lower the cap, prompting the Europeans to push ahead on their own.
The price of Russia’s Urals oil remained $2 per barrel below the $60 per barrel limit on Friday.
The cap bans trade in Russian crude oil transported by tankers if the price paid was above $60 per barrel and prohibits shipping, insurance and re-insurance companies from handling cargoes of Russian crude around the globe, unless it is sold for less than the price cap.
The Commission initially proposed in June to lower the cap from $60 a barrel to $45 a barrel as part of its 18th package of sanctions on Russia.
The Kremlin said on Friday it has good experience in tackling challenges such as a floating Russian oil price cap, which could be introduced by the European Union.
EU sanctions must be agreed unanimously by member states to be adopted.
(Reporting by Julia Payne Editing by Rod Nickel)