European oil price ceiling: what is known about it

The European Union approved the eighth package of sanctions against Russia, which includes a ceiling on the price of Russian oil. Before the publication of the document (expected on October 6), the composition and mechanism of the oil sanctions is not exactly clear, but the following is known:

• In legal terms, the price ceiling is framed as a complete ban on the transportation of Russian oil by sea, but with an exception if oil is delivered at a price below the ceiling set by a coalition of G7 countries and other countries, writes Bloomberg citing a draft version.
• It is added to the current EU sanctions on the transportation of Russian oil to the European Union and third countries (a ban on insurance of tankers and other financial support for transportation by European companies).
• According to The New York Times, exceptions for Greece, Malta and Cyprus (now carrying most of Russian oil) to third countries will continue after the European embargo, which takes effect on December 5. But also only if the price of oil corresponds to the ceiling.
• The sanctions will not affect pipeline supplies.
• In addition to the price ceiling, the package includes a mechanism for monitoring and preventing circumvention of sanctions, for example, changing the flag of ships.

What is not clear

• What exactly will the ceiling be like? In July, the G7 countries discussed a price ceiling for Russian oil in the range of $40–60 per barrel, with the then price of Urals at $80, now Urals is trading at about $70 with a discount to Brent at $20.
• How to force India to comply with the ceiling with China. We wrote more about the problems of implementing the "ceiling" here .
• How effective will the price control mechanism be? According to the NYT, control will be assigned to contractors, insurers and carriers. “If they are caught complicity with Russia in selling oil at a higher price, they face sanctions violation lawsuits,” the newspaper writes.

What else is in the package

The package expands the ban on the import of goods from Russia, especially metallurgical products, as well as a number of other groups. A ban is being introduced on the provision of engineering, legal and IT services to Russian organizations, and sanctions are being tightened on technology exports. According to EUObserver, was not included in the sanctions list. diamond miner Alrosa

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