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US-led price cap coalition agrees to review level of Russian crude price cap in March
U.S. officials and allies agreed to move toward price caps on Russian refined fuel products, agreeing to review the level of the Russian crude oil price cap in March, the U.S. Treasury said in a statement.
Deputy Secretary of the Treasury Wally Adeyemo on Jan. 20 met with deputy ministers representing the global coalition of countries imposing the price cap on seaborne Russian crude oil, known as the Price Cap Coalition.
"The Deputies agreed to an approach for refined products that will institute two distinct caps, in addition to the crude cap: one cap for products that generally trade at a premium to crude, such as diesel or gasoil, and one for products that trade at a discount to crude, such as fuel oil," the statement read.
The EU will implement an embargo on Russian oil products starting from Feb. 5. The EU imported around 220 million barrels of diesel-type products from Russia in 2022, according to Vortexa Ltd. data compiled by Bloomberg.
On Dec. 5, G7 and the EU implemented a $60 per barrel price cap on Russian seaborne oil in order to limit the Kremlin's ability to fund its aggression against Ukraine.
Some EU countries, including Poland and Estonia, have pushed for a price cap even lower than $60. President Zelensky said at the time of the cap was implemented that it was "comfortable for Russia's budget."
Since the EU, the U.K., and the US have already banned the imports of Russian seaborne crude, the price cap mostly applies to other countries that still buy Russian oil. Insurers for the oil market, which are mostly based in the West, are banned from dealing with Russian oil priced above the cap.