Under the new rules, companies involved in the shipping of Russian oil — including shipowners, insurers and underwriters — would be on the hook for ensuring that the oil they are helping to transport is being sold at or below the price cap. If they are caught helping Russia sell at a higher price, they could face lawsuits in their home countries for violating sanctions.
The E.U. oil price cap is only one piece of a complex global puzzle. To make the measure effective, and cut Russian revenue, the United States, Europe and their allies would need to convince India and China, which buy substantial quantities of Russian oil, only to purchase it at the agreed upon price. Experts say that even with willing partners, the cap could be hard to implement.
The European action could also be undercut if OPEC Plus, the oil production group led by Saudi Arabia, announces a cut in output on Wednesday, as is expected. That move would be aimed at keeping the price of crude worldwide higher.
Russian crude will come under an embargo in most of the European Union on Dec. 5, and petroleum products will follow in February. The price cap on shipments to non-E.U. countries has long been championed by U.S. Treasury Secretary Janet Yellen as a necessary complement to the European oil embargo.
Under the E.U. deal, Greece, Malta and Cyprus will be permitted to continue shipping Russian oil. Had they not agreed to place their companies at the forefront of applying the price cap, they would have been forbidden from shipping or insuring Russian oil cargo outside the European Union, a huge hit for major industries.