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The European Union has tentatively agreed on a $60 a barrel price cap on Russian seaborne oil, Reuters reported on Friday, citing sources. The provisional deal reportedly includes an adjustment mechanism to keep the cap at 5% below the market price.
The agreement still needs approval from all EU governments in a written procedure by Friday, the report said.
According to a draft document seen by Reuters, the bloc is set to create a mechanism that would allow for revisions of the maximum price at which Russian oil can be bought every two months.
It would provide for assessments of how the scheme is functioning, allowing the bloc to respond to possible “turbulences” in the oil market that could occur as a result.
The document said a 45-day “transitional period” would apply to vessels carrying Russian-origin crude oil that was loaded before December 5 and unloaded at its final destination by January 19, 2023.
EU nations have been deadlocked since last week as Poland and the Baltic nations demanded measures that put more pressure on the Kremlin’s revenues.
Warsaw, which had pushed for a $30 price cap, had as of Thursday evening not confirmed whether it would support the deal, an EU diplomat told Reuters. The countries have to clinch an agreement before the Monday deadline when the bloc’s oil sanctions kick in.
US Deputy Treasury Secretary Wally Adeyemo reportedly told Reuters on Thursday that a $60 per barrel price cap would be acceptable to Washington, saying it was “in the range” discussed by the Group of Seven (G7) countries.
The initial G7 proposal last week was for a price cap of between $65 and $70 per barrel with no adjustment mechanism. G7 nations are aiming to put the price cap in place before December 5, when wider EU sanctions on Russian oil trade are due to come into force.
The restrictions would ban shipping and services needed to transport Russian oil, such as brokering, financial assistance and insurance, unless the cargoes are purchased at or below the cap.
Moscow has already threatened to ban crude supplies to countries that participate in the scheme.