EU weighs temporary freeze on Russian oil price cap

The European Union is considering a temporary freeze on its price cap for Russian oil as part of a new sanctions package, according to people familiar with the matter. The measure is being discussed in response to soaring global oil prices driven by the ongoing conflict in the Middle East and the effective closure of the Strait of Hormuz.

The price cap mechanism, adopted in 2022, prohibits European companies from providing services like insurance and transportation for Russian oil sold above a set threshold. The cap is automatically adjusted every six months to a level 15 percent below the average market rate for Russia's Urals crude. The current threshold is $44.10 per barrel and is scheduled for review in July. Officials said that review would likely push the cap to at least $65 per barrel, exceeding the $60 level originally set by the Group of Seven nations.

A temporary freeze would maintain the cap at its current rate. Other options under consideration include suspending the automatic increases until the end of the year or limiting any rise to the original $60 G7 level. The proposal is part of the EU's 21st sanctions package against Russia since its full-scale invasion of...