London Daily

Focus on the big picture.
Friday, Jun 26, 2026

EU aims to inflict more pain on Russia with second oil price cap

EU aims to inflict more pain on Russia with second oil price cap

Brussels is suggesting a $100 per barrel price cap on Russian diesel and another lower cap for other oil products.

The EU and its rich country allies are taking aim again at Russia’s ability to earn money from its vast oil reserves by moving to limit the price of Moscow's refined oil products.

The bloc is proposing that G7 allies cap the price of Russian diesel at $100 a barrel and set a separate cap of $45 for other cheaper oil products. The EU wants to bring in the measure on February 5 — the same date as its embargo on buying Russian oil products goes into effect. The news was first reported by Bloomberg.

It’s the second round of price caps on Russian oil; the EU, G7 and Australia last month agreed to impose a price cap on sales of Moscow’s crude in conjunction with an EU embargo on its member countries (except for Bulgaria) buying Russian seaborne crude.

That move imposed a cap on Russian oil at $60 per barrel. The price for Russia’s Urals grade crude was $47 per barrel as of Thursday, according to data from market intelligence firm Argus. That’s well below the $84 per barrel price of benchmark Brent crude, and a sign that the remaining buyers of Russian oil like India and China are squeezing Moscow for massive discounts.


Budgetary pain


Capping crude is already hitting Russia’s budgetary plans hard, and now the EU and its allies want to deal another blow against Russian refined products like diesel.

“Taking into account the effectiveness of the [price cap on Russian crude] … it is appropriate to introduce two additional price caps for petroleum products,” says the proposal by the EU’s External Action Service seen by POLITICO.

Janet Yellen, the U.S. treasury secretary who is on a tour of Africa this week, said: "I am encouraged we will be able to come to agreement by Feb. 5.”

The EU proposal suggests setting one cap of $45 per barrel on products that typically trade at a discount to crude, such as fuel oil and white oils, and a $100 per barrel cap for products that trade at a premium, including diesel and gas oil.

“It will have a significant effect on Russia because oil products are another way that Russia is able export its crude oil,” said Janis Kluge, senior associate and Russian budget watcher at the German Institute for International and Security Affairs.

With Moscow’s oil companies “already struggling” to export crude last year, they “tried to run their refineries at the max” to get customers for the crude, but this will no longer be as easy, he said.

Russia historically supplied more than half the EU’s total diesel imports, prompting concerns of a supply crunch once the embargo comes into force. But last-minute diesel purchases and low demand due to unseasonably mild weather reduce the likelihood of such a scenario in the short term, according to Eugene Lindell, head of refined products at the energy consultancy FGE.

The suggested diesel price cap is “relatively high,” he said, which “is good for consumers because it minimizes the chance of supply interruptions.”

Although the measure will cause “a big … reshuffling of flows globally,” Lindell expects diesel markets to be back to normal by April. Meanwhile, the EU will likely look increasingly to the U.S. and the Middle East for its refined fuels, he added.

The bloc’s ambassadors will formally discuss the proposal on Friday. They have to agree unanimously on the measure before getting the approval of other G7 member nations.

Newsletter

Related Articles

0:00
0:00
Close
Robert Jenrick Defends £5 Million Donation to Nigel Farage Amid Political Scrutiny
Plymouth Museum The Box Wins 2026 Art Fund Museum of the Year Award
UK Government Faces Backlash Over Plans to Use Former Military Sites for Asylum Accommodation
Labour Party Faces Pressure Over Cabinet Stability as Senior Figures Clash on Policy Direction
Heathrow Airport Forecasts Passenger Decline in 2026 as Costs and Climate Disruption Mount
UK Energy Regulator Approves Expansion of Long-Duration Storage to Boost Power System Resilience
Crown Estate Reports Third Consecutive Year of £1 Billion Profit as Debate Over Royal Finances Intensifies
Teenager Charged With Murder in Wales Following Death of 14-Year-Old Boy
Nottingham University Hospitals Maternity Failures Trigger Calls for Public Inquiry Into Patient Safety
EasyJet Rejects £4.9 Billion Takeover Offer From Castlelake but Keeps Door Open for Further Talks
Record Heatwave Triggers UK Transport and Infrastructure Strain as Heathrow Revises Passenger Forecast Downward
Ofgem Approves Sixteen Long-Duration Energy Storage Projects to Strengthen UK Grid Stability
Labour Government Faces Internal Tensions Over Cabinet Decisions and Net Zero Policy Direction
British Food and Drink Exports Fall to Decade Low Amid Trade Friction and US Tariffs
Great Britain Grid Operator Spends £10 Million to Stabilize Electricity Supply During Heatwave Demand Surge
UK Parliament Committee Calls for Urgent National Adaptation Strategy as Extreme Heat Strains Public Infrastructure
Record-Breaking Heatwave Pushes England’s National Health Service to Critical Incident Status as Hospitals Struggle With Surge in Emergencies
UK Government Launches Review of Voluntary National Insurance Contributions System
UK Planning Inspectorate Reports Key Infrastructure and Planning Milestones in Annual Review
UK Government Reviews Travel Expense Reimbursement Rates for Employers and Employees
Civil Nuclear Constabulary Launches National Digital Memorial for Officers Killed in Service
UK and US Expand Collaboration on Nuclear Fusion Research and Workforce Exchange
Environment Agency Secures £275,000 Enforcement Deal with Anglian Water Over Permit Breaches
Independent Inspector Flags Ongoing Failures in UK Home Office Border Case Management
UK Government Considers Zero VAT Rate on Land for Social Housing Development
Bank of England Reports Sharp Drop in Emissions and Warns on Climate-Driven Financial Risk
Consumer Confidence in the UK Falls at Fastest Quarterly Rate Since 2022
UK Borrowing Costs Rise Sharply on Gilt Markets Amid Fiscal and Political Concerns
UK Government Plans Legislation to Bring British Steel into Public Ownership
UK Government Secures £210 Million Nuclear Fuel Deal to Support Ukraine Energy Security
London Ambulance Service Reports Record Emergency Call Volume Amid Severe Heatwave
United Kingdom Faces Record June Heatwave as Temperatures Hit 36.7°C in Somerset
UK Financial Services Reform Debate Intensifies Over Ministerial Regulatory Powers
UK Energy Price Cap Rise Expected to Keep Inflation Above Target Through 2026
UK Biohacking and AI Wellness Trends Drive Surge in Personal Health Monitoring
UK Social Care Sector Sees Workforce Shift as Overseas Recruitment Masks Domestic Labour Decline
Nuffield Trust Warns UK Health Budgets Remain Vulnerable Despite Record Spending Levels
UK Coal Pension Surplus Debate Returns to Parliament as Reform UK MP Seeks Clarity on Distribution
UK MPs Consider E-Petition Calling for NHS Newborn Screening for Spinal Muscular Atrophy
UK Parliament Debates E-Petition Calling for Inquiry Into Pro-Israel Influence in Politics
UK Economy Grew 0.6 Percent in Q1 2026 but Business Sentiment Weakens Over Geopolitical Risks
UK Financial Services Bill Enters Lords Committee Stage With Expanded Ministerial Powers
UK Armed Forces Bill Advances With Plans for Defence Housing Service and Drone Defence Measures
UK Treasury Proposes Higher Electricity Generator Levy and Updated Mileage Allowance Rules
UK Parliament Debates Health Bill Amid Persistent GP Access and Patient Satisfaction Concerns
UK Financial Sanctions Regulator Signals Faster, Intelligence-Led Enforcement Strategy
British Chambers of Commerce Warns Business Confidence Crisis Is Dampening UK Investment
UK Parliament Debates Carbon Budget Order as Pressure Mounts on Net Zero Delivery
UK Energy Price Volatility Reinforces Pressure for Faster Electrification of Economy
UK Defence and Aerospace Strategy Gains Momentum as Keir Starmer Pushes Industrial Cooperation in Berlin
×