On Friday, Bloomberg reported that the Group of Seven has approved the EU’s proposed price cap on Russian diesel exports of $100-$110 per barrel, according to a G-7 official.

Originally the European Commission had sought a price cap of $100 per barrel, however the G7 nations had sought a slightly higher cap price, over fears that the lower ceiling could lead to supply disruptions that would send prices for the fuel skyrocketing, thereby affecting economic conditions and shipping/supply chains in the EU.

The price cap negotiations are ongoing and both the G7 and EU expect there will be an agreement on a price cap for third-country sales by early February.

According to ICE Futures Europe data, headline diesel futures, not including Russian fuel, were at roughly $125 per barrel Friday.

In early December, the EU, G7, and Australia agreed on imposing a price cap on Russian seaborne crude which would ban shipment of any crude which had been bought at a price higher than $60 per barrel. On February 5th, an embargo on processed petroleum products from Russia heading to the EU will take effect.

In December, Russian President Vladimir Putin issued a decree designed to counter the price cap. It made it illegal to deliver any petroleum product to any country which even mentioned the price cap in its sales contracts.

The decree will be in effect between February 1st 2023 and July 1st 2023.