The EU countries have agreed on the European Commission’s proposal to set maximum prices for Russian oil products, the Swedish Presidency of the European Union announced on Friday, Reuters reports.

EU diplomats said the price cap, agreed by ambassadors from the 27 EU countries, is $100 a barrel for premium oil products such as diesel and $45 a barrel for discount products such as fuel oil. The proposal is that they apply from February 5.

Poland and the Baltic states – Latvia, Lithuania and Estonia – pushed for lower limits to reduce Russia’s fuel revenues, delaying talks for several days, diplomats said.

The price caps, along with the EU’s ban on imports of Russian oil products, are part of a broader agreement among the G7 countries.

It comes after a cap on Russian oil at $60 a barrel was imposed on December 5 as the G7, the EU and Australia seek to limit Moscow’s ability to finance its war in Ukraine.

Both limits operate by prohibiting Western insurance and shipping companies from insuring or transporting cargoes of Russian crude oil and petroleum products unless they have been bought at or below a set price ceiling.

Russia wants to increase diesel exports

Russia is set to increase diesel exports in February despite an embargo imposed by the European Union, a price ceiling and a lack of oil tankers, according to data from traders and platform Refinitiv, Reuters reported, Agerpres reported.

On Sunday, an embargo on the import of Russian oil products to EU countries will enter into force, and the “Big Seven” industrialized countries (G7), in turn, will introduce maximum prices for Russian fuel supplies.

Despite these restrictive measures, total exports of diesel from Russian Black and Baltic sea ports are expected to increase by 5%-10% in February compared to January, to 4.2-4.3 million tons, according to traders.

Russia has already increased diesel supplies to Turkey and Morocco in an effort to redirect its oil products ahead of the EU embargo.

However, market sources say that diesel deliveries from Russian refineries this month may be lower than expected. “In addition to the embargo, the supply of petroleum products may be affected by bad weather from the Black Sea ports of Novorossiysk and Tuapse,” said one of the traders.

Traders also claim that Russian refineries may reduce fuel production depending on the level of the price ceiling, which has not yet been established. “If margins turn negative, fuel production could fall quickly and significantly,” the trader added.

The lack of available oil tankers is another factor that could limit Russian diesel exports, the source added, cited by Reuters.