European Union governments tentatively agreed Friday to set a $100-per-barrel price cap on sales of Russian diesel to coincide with an E.U. embargo on the fuel -- steps aimed at ending the bloc's energy dependence on Russia and limiting the money Moscow makes to fund its war in Ukraine.
Diplomats representing the 27 E.U. governments set the cap on Russian diesel fuel, jet fuel and gasoline ahead of a ban taking effect Sunday. It aims to reduce Russia's income while keeping its diesel flowing to non-Western countries to avoid a global shortage that would send prices and inflation higher.The information was provided by diplomats from three different E.U. member nations ahead of a formal announcement by the Group of Seven major industrialized nations.
The deal follows a similar G-7 agreement to limit the price of Russian crude oil to $60 a barrel. All the price ceilings are enforced by a requirement for the world's largely Western-based shippers and insurers to abide by sanctions and handle oil products only priced at or above the limits. The ambassadors of the 27 E.U. nations put forward the decision, and national governments have until early Saturday to react with a written objection. No changes to the deal were expected.
If the price cap works as intended and Russian diesel keeps flowing, fuel prices should not skyrocket, analysts say. Europe could get alternate supplies of diesel from the U.S., India and the Middle East, while Russia could seek new customers outside Europe.
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