The decision envisages an adjustment mechanism to keep the cap at 5% below the market price.
The measure is intended to limit Russia's ability to fund its aggression against Ukraine.
An embargo on Russian seaborne oil approved by the EU in June will take effect on Dec. 5.
Since Russian seaborne oil will be banned for EU countries, the price cap is a measure intended mostly for non-EU countries. Insurers for the oil market, which are mostly based in Europe, will be banned from dealing with Russian oil priced above the cap.
"The EU agreement on an oil price cap, coordinated with G7 and others, will reduce Russia's revenues significantly," European Commission President Ursula von der Leyen said on Dec. 2. "It will help us stabilize global energy prices, benefitting emerging economies around the world."
The price cap will also strengthen the effect of the bloc's sanctions against Russia following its invasion of Ukraine, von der Leyen added.
"Together with our partners, we stand united and firm in our opposition to Russia's atrocious war," von der Leyen stressed.
Earlier in November, EU diplomats discussed a price cap on Russian oil in the range of $65-70 per barrel.
On Nov. 28, Bloomberg reported, citing data provided by Argus Media Ltd., a publisher of commodity prices., that Russia's Urals crude oil fell to $51.96 a barrel at the Baltic Sea port of Primorsk — below the EU price cap.
Earlier the publication said Russia had already lost most of its oil market in the European Union's northern countries even before the EU embargo on Russian oil was set to take effect.
Russian oil shipments to northern Europe have fallen below 100,000 barrels a day, compared to 1.2 million barrels a day sent to the region's ports each day in early February, according to Bloomberg.
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