EU Agrees On Price Cap, For Russian Oil Over Ukraine War

European Union countries agreed on Wednesday to impose a price cap on Russian oil and other new sanctions after Moscow illegally annexed four regions in Ukraine amid its monthslong war, EU officials said. Diplomats struck the deal in Brussels that also includes curbs on EU exports of aircraft components to Russia and limits on steel imports from the country, according to an official statement from the Czech rotating EU presidency.

The 27-nation bloc will impose a ban on transporting Russian oil by sea to other countries above the price cap, which the Group of Seven wealthy democracies want in place by December 5, when an EU embargo on most Russian oil takes effect. A specific price for the future cap has yet to be defined. A deal on the price cap was not easy to reach because several EU countries were worried it would damage their shipping industries.

More details about the sanctions will be published as soon as Thursday. The new package of sanctions was proposed by European Commission President Ursula von der Leyen last week amid heightened security concerns over Russian President Vladimir Putin's nuclear threats and his annexation of parts of Ukraine.

"We have moved quickly and decisively," von der Leyen said as she welcomed the deal. "We will never accept Putin's sham referenda nor any kind of annexation in Ukraine. We are determined to continue making the Kremlin pay." The new sanctions also include an "extended import ban" on goods such as steel products, wood pulp, paper, machinery and appliances, chemicals, plastic and cigarettes, the Czech presidency said.

A ban on providing IT, engineering and legal services to Russian entities will also take effect. The package, which will also include new criteria for sanctions circumvention, builds on already-unprecedented European sanctions against Russia as a result of its invasion of Ukraine in February. EU measures to date include restrictions on energy from Russia, bans on financial transactions with Russian entities, including the central bank, and asset freezes against more than 1,000 people and 100 organisations.

The 27-nation bloc already agreed to ban Russian oil that comes by sea, not pipeline, but some member countries still require Russian supplies at low prices. Hungary, which has questioned the efficiency of the previous measures and earlier said it could not support further energy sanctions, said it has been granted exemptions from any new steps that would have put its energy security at risk. The EU's planned ban on most Russian oil products could force Russia to lower prices to find new customers. OPEC oil-producing countries are meeting on Wednesday to discuss cutting production to boost oil prices, which would help Russia.

(PTI)