EU: The price of Russian oil has been capped at $60

The European Union has agreed to cap the price of Russian seaborne oil at $60 per barrel, a Polish official stated.

According to Andrzej Santos, Poland's ambassador to the EU and a key negotiator on the policy, and other officials who spoke on condition of anonymity, European Union diplomats reached an agreement on a $60 cap on Russian oil shipments.

Warsaw has been hesitant to accept the deal until it had thoroughly examined the mechanism proposed to keep the cap below the market price.

Finally, it determined that the mechanism in question would keep the price ceiling at least 5% below market fluctuations.

The EU can now begin a written process to approve the agreement, which it intends to formally announce on Sunday.

Towards new sanctions talks

The $60-per-barrel cap is slightly lower than what major buyers of Russian oil, such as China and India, are currently paying, but it will not apply if buyers transport and insure cargo with companies from countries other than the group that imposed the cap.

The cap is unlikely to significantly reduce Russia's oil revenues, which are critical to funding the country's war in Ukraine.

The EU's diplomats also agreed this weekend to move forward with talks on a new round of sanctions, including new restrictions on the Russian economy and "key" figures.

That commitment was critical to reaching an agreement on the cap, because some of Europe's staunchest supporters, such as Poland, do not believe the cap is sufficient to harm Russia's oil export revenues.

With information from Reuters, Bloomberg, and The New York Times