The EU and G7 agreed on February 4 to impose two separate caps on different Russian petroleum products based on their market value, in an effort to further strangle Moscow’s revenue stream from oil and gas exports.

As proposed by the European Commission, the European Council and the G7 have agreed to introduce a price cap of $100 per barrel for premium Russian oil products such as diesel, kerosene and gasoline, and a $45 per barrel cap for discounted products such as fuel oil and naphtha. EU and G7-based companies will be barred from providing transport services for the sale of Russian petroleum products, or any technical assistance, brokering services, financing or financial assistance for the delivery of those cargoes, unless the price caps are complied with.

The caps came into force on February 5, three months after a similar cap of $60 per barrel was introduced on Russian crude oil exports.

“We are making Putin pay for his atrocious war. Russia is paying a heavy price, as our sanctions are eroding its economy, throwing it back by a generation,” European Commission President Ursula von der Leyen said in a statement. “Today, we are turning up the pressure further by introducing additional price caps on Russian petroleum products.”

The EU aims to have a tenth package of sanctions against Russia introduced by the first anniversary of Moscow launching its invasion of Ukraine on February 24, 2022, von der Leyen said.

The latest measures allow for a 55-day wind-down period during which seaborne Russian petroleum products purchased above the price cap can still be received, provided that they were loaded onto a vessel prior to February 5 and unloaded at the final port of destination prior to April 1, 2023.

“The price caps for petroleum products and crude oil will be continually monitored to ensure their effectiveness and impact,” the European Commission said. “The price caps themselves will be reviewed and adjusted as appropriate.”

The European Council said it would review the price cap mechanism for Russian crude oil in mid-March, with reviews due to take place every two months after that. This was a win for more hawkish EU states such as Poland and the Baltics, which had demanded the two-month review.

The caps on Russian fuel exports coincide with the introduction of an embargo by the EU of those supplies. Therefore the caps are aimed at depriving Moscow of revenues from other markets such as India and China.