London Daily

Focus on the big picture.
Friday, Mar 13, 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
Asian Energy Security Tested as Strait of Hormuz Disruption Threatens Oil Supplies
Iran Sets Three Conditions for Ending Regional War as Diplomatic Efforts Intensify
Tesla Secures Approval to Supply Electricity Directly to Homes Across Britain
Prince William Delivers Tribute to Australia’s Naval Alliance Amid Renewed Royal Spotlight on the Country
UK Foreign Secretary Travels to Saudi Arabia to Reinforce Support for Regional Allies
Putin’s ‘Hidden Hand’ May Be Assisting Iran in Conflict With Trump, UK Defence Secretary Warns
UK Sets April Deadline for Tech Platforms to Strengthen Online Protections for Children
Elon Musk Moves Into Britain’s Energy Market as Tesla Wins Licence to Supply Power
UK Watchdog Warns Fuel Retailers Against Profiteering Amid Iran War Price Surge
Report Claims Iran Used UK Charity Network to Expand Influence
United States and United Kingdom Establish Joint Standards for Counter-Drone Technology
Iran May Be Laying Naval Mines in Strait of Hormuz, UK Warns Amid Escalating Gulf Tensions
US Deploys Bunker-Buster Bombs to UK Airbase as Iran Conflict Intensifies
British Troops in Iraq Intercept Iranian Drones Targeting Coalition Base
Release of Mandelson Files Raises Tensions as UK Seeks Stable Relations With Donald Trump
UK Documents Reveal Starmer Was Warned About Mandelson’s Epstein Links Before Ambassador Appointment
Nearly Five Hundred UK Mortgage Deals Withdrawn in Two Days as Market Volatility Forces Lenders to Reprice
Three Cargo Ships Hit Near Iran as Attacks Spread to Strategic Strait of Hormuz
Why British Police Repeatedly Declined to Investigate Jeffrey Epstein’s UK Links
UK Parliament Ends Hereditary Seats in House of Lords, Closing Chapter on Centuries of Aristocratic Lawmaking
EU and UK Urge Israel to Act Against Rising West Bank Settler Violence Amid Regional Tensions
US Senator John Kennedy Says Keir Starmer Should Not Be Trusted for Military Advice Amid Iran War Debate
UK High Court Rejects Attempt to Revive Terrorism Charge Against Kneecap Rapper
Revolut Secures Full UK Banking Licence After Multi-Year Regulatory Wait
Kentucky’s Bench Boost Powers Wildcats Past LSU in SEC Tournament Opener
British Couple Die After Being Pulled From Water at Australian Beach During Family Visit
Global Energy Agency Announces Record Release of 400 Million Barrels to Stabilize Oil Markets Amid Hormuz Disruption
British Airways Suspends UK Repatriation Flights as Middle East Travel Disruption Deepens
US Forces Prepare Ordnance at RAF Fairford as Strategic Bombers Deploy for Middle East Operations
Nigel Farage Faces Criticism After Saying Britain Should Stay Out of Iran War
Landmark UK Trial Begins Over Sony’s PlayStation Store Pricing
UK High Court Rejects Bid to Challenge Britain’s Chagos Islands Agreement With Mauritius
Finnish Duo Triumphs in England’s Annual Wife-Carrying Race, Winning a Barrel of Ale
How U.S. and UK National Security Strategies Are Reshaping the Global Business Landscape
Green Party Gains Momentum as Labour Shifts Toward the Political Centre
Royal Navy Destroyer HMS Dragon Sets Sail for Eastern Mediterranean as Regional Tensions Rise
UK Homebuilder Persimmon Warns Iran Conflict Could Dent Property Buyer Confidence
Roman Abramovich Signals Legal Fight if UK Seeks to Seize Chelsea Sale Funds
UK Ready to Back Emergency Oil Reserve Release as Middle East Conflict Pushes Prices Higher
Study of 40,000 Articles Sparks Debate Over Alleged Anti-Muslim Bias in UK Media
US and UK Army Chiefs Strengthen Cooperation on the Future of Armored Warfare
Britain’s Search for the Next ARM Intensifies as Startups and Investors Target the Semiconductor Frontier
Three US Strategic Bombers Arrive at RAF Fairford as Iran Conflict Intensifies
Cancer Death Rates in the UK Fall to the Lowest Level on Record
UK Government Bond Yields Retreat Slightly After Sharp Spike Triggered by Middle East Conflict
UK Chancellor Warns Middle East War Could Push Inflation Higher
UK Prime Minister Warns Iran Conflict Could Drive Up Prices and Threaten Economic Stability
Trump Declines UK Offer to Deploy Aircraft Carriers to Middle East Amid Iran Conflict
Prince Harry and Meghan Markle to Return to Australia After Seven Years for Philanthropic and Business Engagements
UK Government Signals Independence From Washington as Cooper Says Britain Does Not Agree With Trump on Every Issue
×