EU reaches deal to cap price on oil from Russia

BRUSSELS — The European Union reached a deal Friday for a $60-per-barrel price cap on Russian oil, a key step as Western sanctions aim to reorder the global oil market to prevent price spikes and starve President Vladimir Putin of funding for his war in Ukraine.

After a last-minute flurry of negotiations, the EU presidency, held by the Czech Republic, tweeted that “ambassadors have just reached an agreement on price cap for Russian seaborne #oil.” The decision must still be officially approved with a written procedure but is expected to go through.

Europe needed to set the discounted price that other nations will pay by Monday, when an EU embargo on Russian oil shipped by sea and a ban on insurance for those supplies take effect. The price cap, which was led by the Group of Seven wealthy democracies and still needs their approval, aims to prevent a sudden loss of Russian oil to the world that could lead to a new surge in energy prices and further fuel inflation.

Poland long held up an agreement, seeking to set the cap as low as possible. Following more than 24 hours of deliberations, when other EU nations had signaled they would back the deal, Warsaw finally relented late Friday.

The $60 figure sets the cap near the current price of Russia’s crude, which recently fell below $60 a barrel. Some critics say that is not low enough to cut into one of Russia’s main sources of income. It is still a big discount to international benchmark Brent, which traded at around $85 a barrel Friday afternoon, but could be high enough for Moscow to keep selling even while rejecting the idea of a cap.