It seems that the EU leaders have finally agreed on a price level at which they will cap the seaborne oil from Russia. According to an EU diplomat, the agreed-upon price is $60 per barrel - There is also an adjusting mechanism in place that will always keep the price 5% lower than the current market price.
Out of all the countries, Poland is the one that wanted the price cap to be very low. So it still has some more time to think about the current price cap. According to the procedure, the price cap must be approved by all the governments of the European Union.
Initially, the G7 countries had proposed a price cap around the $65 to $70 range and also had no adjustment mechanism. But it seems that the EU countries have come up with an even lower price cap as well as an adjustment mechanism.
According to reports, the countries which have rejected the $65 price are Estonia, Lithuania, and Poland, which believe that it will not be effective in cutting Russian revenues. The main goal of this whole ordeal is to affect Moscow's ability to continue the Ukraine war since most of Russia's revenue is from the sale of crude oil and gas.
Based on the price mechanism, it will remain 5% below the current market price of crude oil. So if the international crude oil price is $100 per barrel, then the price cap will make the Russian oil only worth $95 per barrel.
Through the price cap, the EU leaders are trying to stop the shipping as well as the insurance companies from dealing with Russian Crude oil. The only way these companies will be able to deal with Russian oil is if it is sold at a lower price than the one set by the G7 countries.
Currently, the biggest insurance and shipping companies around the world are actually based in the countries from the G7 group.