The European Union is considering temporarily freezing its price cap on Russian oil as the Middle East conflict continues to drive energy prices higher.
According to a Bloomberg report, the bloc introduced a dynamic mechanism last year that automatically adjusts the cap every six months to stay 15% below the average price of Russia's Urals crude. The current cap stands at $44.10 per barrel.
Officials are concerned that surging oil prices linked to the Iran conflict and disruptions in the Strait of Hormuz could push the next cap level significantly higher. A July review could raise the threshold to at least $65 per barrel, exceeding the previous $60 cap agreed by the G7.
Options under discussion include keeping the cap unchanged, suspending automatic increases until year-end, or limiting any increase to $60 per barrel. The proposal is expected to be part of the EU's 21st sanctions package against Russia, to be finalized in early June.
Additional measures may target more banks, oil traders, refineries, and cryptocurrency operators, as well as around 20 vessels linked to Russia's shadow fleet. The package may also include export controls on critical minerals and technologies used in Russia's aerospace and defense industries.
