EU ambassadors agreed on Wednesday on a new round of sanctions on Russia that includes a price cap on Russian oil.
The officials agreed on a draft text for the sanctions that is expected to be released on Thursday, according to Politico. Some countries had concerns that the attempted price cap could impact their shipping industries, including Malta, Greece, and Cyprus, which received some exemptions, but details aren’t clear.
The idea of placing a price cap on Russian oil was pushed by US Treasury Secretary Janet Yellen and endorsed by the G7. Moscow has warned it would cut off any countries from Russian energy that try to impose caps, but that hasn’t stopped the Western powers from pushing ahead with the plan.
An EU ban on importing Russian oil and providing insurance for Russian oil shipments comes into effect in December. The idea of the price cap is to only provide insurance to shipments being sold at a set price, but this requires cooperation from Moscow, which has made clear it will retaliate.
If Russia responds by slashing oil production, it could send global oil prices skyrocketing, and many experts and analysts have warned that will probably happen. The price cap plan also requires the cooperation of China and India, who have been purchasing Russian oil at a discount already and have little reason to risk changing the arrangement.