EU May Suspend Russian Oil Price Cap Amid Iran Situation

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The European Union is considering a temporary suspension of the automatic review of the price cap on Russian oil amid a sharp increase in global energy prices triggered by the escalating situation around Iran, according to TASS, citing Bloomberg.

Under the current mechanism introduced by the EU in 2025, the maximum price for Russian Urals crude oil is reviewed every six months and set at 15% below the average market price. The next update is scheduled for later this summer.

According to agency sources, the rapid rise in oil prices following the escalation of the conflict around Iran and the halt of shipping through the Strait of Hormuz could lead to an automatic increase in the price cap from the current $60 to approximately $65 per barrel.

To prevent this scenario, Brussels is discussing several options. The main one involves maintaining the current limit without changes. Additionally, a temporary suspension of the automatic adjustment mechanism until the end of the year is being considered, or the introduction of a restriction that would prevent the ceiling from rising above the G7-set level of $60 per barrel.

Current sanctions prohibit European companies from providing insurance, transportation, and escort services for Russian oil deliveries if the price exceeds the established cap. EU authorities fear that an automatic increase in the limit amid rising global prices could undermine the effectiveness of existing restrictions.