BRUSSELS, Dec 3 (KUNA) -- The Council of the European Union agreed Saturday on a USD 60 per barrel price cap on crude oil as well as petroleum oils and oils obtained from bituminous minerals which originate in or are exported from Russia.
The level of the cap was established in close cooperation with the Price Cap Coalition and will become applicable as of 5 December, said the Council in a statement tonight.
The price cap on Russian oil will limit price surges driven by extraordinary market conditions and drastically reduce the revenues Russia has earned from oil after it unleashed its war against Ukraine, said the Council which represents the 27 EU member states.
It will also serve to stabilise global energy prices while mitigating adverse consequences on energy supply to third countries, it noted.
The Council decision also introduced an exemption from the above-mentioned prohibitions for crude oil or petroleum products which originate in or are exported from Russia, and are purchased at or below a pre-established price cap agreed by the Price Cap Coalition.
Today's decision sets the level at which the exemption apply, and introduces a transition period of 45 days for vessels carrying crude oil originating in Russia, purchased and loaded onto the vessel prior to 5 December and unloaded at the final port of destination prior to 19 January 2023.
As the price cap may be periodically reviewed to adapt to the market situation, today's decision also sets a transition period of 90 days after every change in the price cap, to ensure coherent implementation of the price cap by all operators, it said.
The functioning of the price cap mechanism will be reviewed every two months to respond to developments in the market, and will be set at least 5 percent below the average market price for Russian oil and petroleum products, calculated on the basis of data provided by the International Energy Agency.
The Council also introduced an "emergency clause" which allows the transport of oil beyond the price cap or the provision of technical assistance, brokering services or financing or financial assistance related to the transport, when these are necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment, or as a response to natural disasters, it said.
The relevant legal acts will soon be published in the EU Official Journal. (end)