London Daily

Focus on the big picture.
Monday, Oct 19, 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
Surging Cloned Number Plates Severely Complicate Traffic Enforcement and Police Investigations
Mounting Opposition Challenges Planned Rollout of Autonomous Taxis Across London
Influential Think Tank Urges Rejoining European Union to Navigate Geopolitical Crises
Government Review Recommends Slashing Benefits to Fund Youth Employment Initiatives
Senior Minister Shabana Mahmood Seeks New Law Enforcement Pact With European Union
Airbus Executive Warns Britain Risks Losing Crucial Role in European Space Industry
Exorbitant Electricity Costs Push British Steelmakers to Worst Competitive Position in Three Years
British Food and Beverage Exports to European Union Collapse by Over a Third Since Brexit
Up to Twenty English Maternity Units Face Impending Closure Due to Safety and Staffing Crises
Government Declares Severe Drought Across Southern England Following Record Dry Spell
Corporate Profit Warnings Reach Two-Year High Amid Middle East Conflict and Rising Costs
International Monetary Fund Warns Chancellor John Healey Against Proposed Bank Tax Raid
Northern Ireland Secures Favorable Agricultural Export Agreement with European Union
Scottish Government Approves Major Offshore Floating Wind Farm Near Aberdeenshire
High Speed Two Rail Project Faces Three Billion Pound Cost Escalation on Initial Phase
National Health Service Warns of Winter Capacity Crisis Across English Hospitals
Tata Steel Confirms Two Thousand Job Cuts at Port Talbot to Fund Green Transition
Global Microchip Developer Announces Three Billion Pound Semiconductor Plant in Cambridge
United Kingdom Artificial Intelligence Safety Institute Proposes Mandatory Licensing for Generative Models
United Kingdom Commits Additional Long-Range Weapons and Air Defenses to Ukraine
British Chancellor Overhauls Infrastructure Financing to Bypass Borrowing Constraints
Bank of England Holds Benchmark Interest Rate at Four Point Five Percent
First Minister Rhun ap Iorwerth Confirms Constitutional Discussions Over Welsh Independence During Initial Bilateral Call with Prime Minister
Labour Party Instructs Local Council Groups to Sever Power-Sharing Accords with Green Party Over New Controversial Policy Positions
Institute for Fiscal Studies Warns of Thirty-Five Billion Pound Fiscal Gap Ahead of Chancellor John Healey Upcoming Autumn Budget
House of Lords Backs Landmark Legislative Amendment to Decriminalize Abortion Across England and Wales
United Kingdom Defence Secretary Wes Streeting Travels to Pentagon for High-Level Strategic Talks Amid Escalating Tensions Over Ukraine and United States Policy Shifts
Bank of England and International Monetary Fund Officials Issue Urgent Warnings Regarding Potential Artificial Intelligence Financial Market Shocks
Reform UK Faces Severe Political Fallout and Scrutiny After Undercover Media Investigations Reveal Systemic Racism Among Candidates
Former Democratic Unionist Party Leader Jeffrey Donaldson Sentenced to Fifteen Years in Prison Following Landmark Child Sexual Abuse Trial
House of Lords Votes to Amend Schools Bill Implementing Comprehensive Social Media Ban for Children Under Sixteen Years of Age
International Monetary Fund Upgrades United Kingdom Growth Forecast for Two Thousand Twenty-Six While Warning of Energy-Driven Inflation Pressures
Competition and Markets Authority Launches Formal Inquiry Into Corporate Artificial Intelligence Partnerships
Automotive Industry Leaders Urge Westminster to Accelerate Electric Vehicle Charging Infrastructure Rollout
Home Office Expands Digital Border Security Framework With Mandatory Electronic Travel Authorizations Across United Kingdom
Northern Ireland Executive Reaches Final Consensus on Public Sector Pay Reform and Budget Allocations
Welsh First Minister Secures Additional Funding for Rural Agricultural Transition and Sustainable Farming Schemes
Scottish Government Unveils Accelerated Regional Infrastructure Strategy to Boost Clean Energy Manufacturing
National Health Service England Launches Emergency Recruitment Drive to Alleviate Severe Acute Care Winter Backlogs
Bank of England Monetary Policy Committee Signals Cautious Approach to Interest Rate Reductions Amid Persistent Wage Growth
British Government Finalizes Emergency Energy Support Package to Protect Households From Winter Price Surges
Russell Brand Trial Begins at Southwark Crown Court
UK Parliament to Debate Climate Risks and Council Tax Following Public Petitions
Department for Transport Demands Safety Audits Following Regional Rail Disruptions
House of Lords Scrutinizes Amendments to Armed Forces Bill
Devolved Administrations in Scotland and Wales Criticize Post-Brexit Funding Framework
Prime Minister Andy Burnham Defends Middle East Military Support Under Parliamentary Scrutiny
NHS Leaders Warn of Severe Pressure on Hospitals from Winter Virus Outbreaks
Retailers and Business Groups Lobby Chancellor for Relief from Rising Employment Taxes
City of London Taskforce Urges Radical Reform to Prevent UK From Becoming "Incubator Nation"
×