London Daily

Focus on the big picture.
Monday, Oct 05, 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
BT Accused of Pressuring Vulnerable Customers During Digital Landline Shift
British Carmakers Warn of Growing Pressure From EU-China Tariff Dispute
Green Party of England and Wales Adopts Motion Defining Zionism as Racism
Medical Charity Threatens NHS Legal Action Over Two-Year Autism and ADHD Assessment Waits
British Transport Police Report Record Rise in Violence on Railways
Glasgow Council Workers Face Pay Cuts Under Fire-and-Rehire Plan
British Medical Groups Press Prime Minister Andy Burnham to Cancel £330 Million Palantir NHS Contract
UK Faces Record Bluetongue Outbreak Across Livestock Farms
UK Schools Report Thousands of Child-on-Child Sexual Offences
High Court Overturns Ban Blocking Gaza Families From Reuniting With Relatives in UK
G7 Authorizes Emergency Fuel Release as UK Diesel Prices Hit £2 a Litre
France and Italy Draw 1-1 in Nations League Match
Pope Leo XIV and Prince Albert II of Monaco Meet in Metz
SNCF Expands Low-Cost Ouigo High-Speed Service Between Lyon and Bordeaux
Paris Expands Dedicated Cargo Bike Routes for Urban Deliveries
French Film Industry Pushes for Tighter Streaming Investment Rules
Marseille Court Hands Down Prison Terms in Public Procurement Corruption Case
LVMH and Kering Rely on US Demand as Chinese Luxury Spending Slows
Toulouse Aerospace Sector Launches €80 Million Modernization Fund
Javier Milei Courts French Investment in LNG and Lithium
Mistral AI Launches Sovereign Model for European Public Services
French Competition Authority Fines Retailers €40 Million Over Misleading Promotions
France Records Exceptional Electricity Exports as Nuclear Output Recovers
Dassault Aviation Expands Rafale Assembly Capacity at Mérignac
Sanofi Invests €1 Billion in New Biologics Production Hub Near Lyon
France Protests Germany’s Extension of Border Controls Into 2027
French Public-Sector and Transport Unions Threaten National Strike
France Deploys Riot Police After Violence in Lyon Suburbs
French Anti-Terrorism Prosecutors Investigate Radicalized Flydubai Co-Pilot
France’s Defense Budget Surpasses NATO’s 2% of GDP Target
French Government Faces No-Confidence Threat Over Budget
France and G7 Release 100 Million Barrels From Strategic Oil Reserves
France Convenes Emergency Defense Council Over Threats to Commercial Shipping
France and Germany Coordinate Military Response After Russian Strikes on Kyiv Infrastructure
UK Police Release Six Iranian Nationals on Bail After RAF Fairford Security Alert
UK Business Confidence Falls as Energy Costs and Tax Uncertainty Rise
Cornwall Insight Warns UK Energy Bills Could Rise 16% in January
UK Introduces Zero VAT on Household Electricity Bills
UK 30-Year Gilt Yield Hits 6% as Bond Market Pressures Intensify
UK Introduces Stricter Subcontractor Checks and Expanded Trade Union Access
Green Party Proposes Three-Year Emergency Freeze on Private Rent Increases
UK Treasury Committee Seeks Tax Clarification Over Manchester City Investigation
Royal Marines Deploy to Faroe Islands for Northern European Security Exercise
UK Business Confidence Weakens as High Costs Delay Investment
UK GDP Growth Revised Up to 0.5% in Second Quarter
Bank of England Warns of Financial Stability Risks From Autonomous AI
UK Expands Early Prisoner Release Scheme to Ease Overcrowding
UK Records Worst Bluetongue Outbreak on Record Across Livestock Farms
UK Government Faces Shrinking Fiscal Headroom Ahead of October 28 Budget
UK 30-Year Gilt Yield Reaches 6% as Energy Shock Drives Borrowing Costs Higher
×