Russian oil is now 20% below the proposed price cap as EU nations remain split in talks
- Russia's Urals crude oil fell to $51.96 per barrel at the Primorsk Baltic Sea port.
- That's 20% lower than the European Union's proposed price cap of $65 per barrel, though some nations want it lower.
Russia's flagship crude oil fell further below the European Union's proposed price cap, which still faces opposition from some member states.
Urals grade crude declined to $51.96 per barrel at the the Primorsk Baltic Sea port, according to Argus Media data cited by Bloomberg. That's 20% below the EU's potential price cap of $65 a barrel.
Last week, reports said a price cap of $65-$70 was under discussion. Talks stalled over the weekend, and it now looks closer to $65, while Poland and Baltic states push for an even lower cap. EU member countries are set to continue deliberating the effort on Monday.
The price cap will coincide the EU's December 5 embargo on seaborne Russian crude imports and ban on related services for deliveries worldwide. The idea is to create a loophole in the EU embargo that keeps supplies of Russian oil flowing on the global market while limiting export revenues for Moscow.
The result of a price cap would penalize and buyer that pays above the set price and restrict their use of European ships and would prohibit insuring the vessels.
But because Russian oil is already selling below the proposed price cap level, analysts have noted that it wouldn't be low enough to weaken Moscow's revenue.
"Effectively what price caps look like for oil is not a measure to reduce Russian revenue, but essentially to keep Russian oil on the market," RBC commodity strategist Helima Croft told CNBC last week.
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