Announcement of the Price Cap Levels for Russian Refined Products

The UK, in partnership with the G7 countries, Australia and the European Union, has already implemented a price cap on Russian crude oil trade by firms shipping oil to third countries. This cap was set at USD$60 per barrel, and came into effect on 5 December 2022.

It was also agreed that a price cap would come into effect for Russian refined oil products from 5 February 2023, and the UK and its price cap Coalition partners have agreed that this cap will be determined by categorisation of refined oil products as follows:

As with the 5 December oil price cap, OFSI has issued a General Licence to implement the caps for oil products. As with the existing price cap for oil, the level of both caps will be kept under review.

Furthermore, as announced on Thursday (see OFSI blog) OFSI has issued a further wind-down General Licence for oil products. This will permit contracts to ship Russian oil products traded at a price above the relevant cap where the products were loaded before 5 February 2023, and are unloaded at the destination port by 1 April 2023.

OFSI has released updated guidance on the Maritime Services Prohibition and the Oil Price Cap, which provides full detail of the implementation of the price caps, OFSIs approach to enforcement, and the requirements on involved persons. This has been reviewed and updated to reflect requests for clarification and additional details for refined oil products. Bespoke forms for required reporting, reporting suspected breaches, and specific license applications are available here. HM Treasury will organise teach-ins for interested stakeholders over the next few weeks.

Any reporting or queries should be directed to oilpricecap.OFSI@hmtreasury.gov.uk.

To see the general licences, guidance and reporting forms,

click here