1. Why did PCC introduced a price cap for Russian oil and petroleum products?

There is a shared interest around the World in lowering global energy prices and reducing the inflationary pressures caused by Russia’s brutal war of aggression against Ukraine. This mechanism is designed to help counter any negative impact on global oil prices, caused by the war, and to curtail revenue to Russia used to fund its war in Ukraine.

The overall aim is to ensure reliable supply of Russian oil onto the global market, not to deter it. To that end, a simple compliance regime—consistent with many already in place— has been designed, which consists of a recordkeeping and attestation process that is straightforward and provides safe harbour for good faith actors.

2. Why did not PCC simply agree to restrict the trade of oil and petroleum products from Russia?

Restricting services only, without a price cap, would have had a materially inflationary impact on global oil prices. This innovative policy is putting downward pressure on energy prices by keeping Russian oil and petroleum products on the market.

3. How the price cap actually works?

The price cap mechanism allows for the provision of services of maritime transport of Russian oil and petroleum products, so long as it is purchased at or below the price cap.

The caps are currently set at $60 per barrel for crude oil, $100 per barrel for premium-to-crude refined product and $45 per barrel for discount-to-crude refined products.

4. Are there benefits from compliance with the price cap?

The economic benefits of the price cap are flowing directly to all countries that continue buying Russian oil and petroleum products, in conformity with the price cap, i.e. that are buying those products for a price at or below the cap.

PCC countries are already committed to phasing out their purchases of Russian oil and petroleum products. However, the price cap allows service providers from PCC countries to support shipments of Russian oil and petroleum products to other countries, including non-G7 economies like China, India and Turkey, as well as developing countries in Africa, Asia, and Latin America.

If the oil or petroleum products are purchased below the price cap, new buyers can continue to use services offered by firms located in PCC countries, to efficiently transport the oil. These services include, but are not limited to, vessel provision and management, vessel flagging and registration, and insurance.

5. What could be the consequences of non-compliance with the price cap?

The buyers that rely on new and opaque service, finance and insurance schemes to facilitate Russian oil and petroleum products purchases above the price cap, may face significant additional risk and costs that would largely offset possible benefits.

More information:

Official Journal 

Commission Guidance on the oil price cap

Oil imports: Frequently asked questions

More information on EU sanctions

EU Delegation to China - Oil caps for stable prices - Price Cap Coalition (PCC)