According to Bloomberg, citing a document, the EU proposed delaying the implementation of the price cap on Russia’s oil exports by adding 45 days to its introduction.

The allotted time applies to oil loaded before December 5 when oil sanctions are supposed to kick in and unloaded by January 19, which aligns with a previous announcement by the US and the UK. However, to approve the cap, EU ambassadors are due to convene on Wednesday, and diplomats are expected to also discuss the price level, which according to Bloomberg if backed and approved, the EU and the Group of Seven (G7) could announce the cap the same evening.

The decision can only be taken if the EU unanimously votes in favor, and the G7 will be voting in parallel to the 27-nation bloc. It still may not be as effective, as the World Bank reported last month that the proposed G7 Russian oil price cap would need the participation of emerging markets and developing economies to achieve its objectives.

As a result, companies would be prohibited from providing shipping and insurance, brokering, and financial assistance, which facilitate the transportation of Russian oil unless it sells below the agreed threshold.

In light of that, Russian Deputy Prime Minister Alexander Novak affirmed on Wednesday that Russia will not send oil and petroleum products to nations that use the price-cap approach; instead, Moscow will reroute supplies to market-oriented allies or limit production entirely.

"Russia confirms its status as a reliable energy supplier to the world market and the market status of our relations with partners. In this regard, we do not plan to supply oil and petroleum products to countries that will apply the principle of a price cap with the subsequent reorientation of supplies to market-oriented partners or with a production reduction," Novak said.

A 'cartel deal'

The EU originally adopted the US-influenced package of oil sanctions in June with two aims, keeping Russian oil on the market to steer away from price increases and simultaneously limiting Russia's revenues.

According to a senior but anonymous US Treasury official on Wednesday, the price is anticipated to stay stable above the price of production but may be revised every few months, adding that the goal of the policy overseen by Treasury’s Office of Foreign Assets Control was to make the industry guidance easy in an attempt to keep Russian oil on the market.

The price ceiling on Russian oil that Western countries seek to implement may be higher than the previously proposed range of $40-$60 per barrel. The United States and its Group of Seven allies will likely agree soon to cap the price of Russian oil at $60-70 per barrel on Wednesday, The Wall Street Journal reported on Tuesday, citing sources familiar with the matter.

A previous provision was also softened in the draft legislation, which would have completely banned Russian crude vessels purchased above the threshold from entering European services for shipments of all oil. The legislation now states that a vessel “intentionally” carrying Russian crude oil or petroleum above the cap will not receive transport services “for 90 days following the date of unloading of the cargo purchased above the price cap.”

A 90-day transition is also part of the proposal in case of any future changes or updates to the level of the price cap, as most G7 nations and the EU intend to ban the import of Russian crude this year. Price caps on refined petroleum products however will be effective on February 5.

Back in September, Energy Minister Nikolay Shulginov rejected the "price cap" idea as an attempt to force a "cartel deal" on Moscow. “We will definitely not sell at a loss or below cost. Well, that’s not possible. This is some kind of cartel deal against us. We will certainly not allow such an attitude towards us,” the Minister told broadcaster Rossiya-1.

The US Treasury Department announced in a guidance document released at the beginning of September that buying considerable amounts of Russian oil above the price cap agreed upon or providing fraudulent data or documentation of the transactions may bring about sanctions enforcement and that the price ceiling will go into force on December 5 for crude oil and February 5 for refined goods.

Following the announcement, Russian President Vladimir Putin commented on the price cap attempts by stressing that his country would stop supplying oil and gas to countries that impose price ceilings. Capping prices, as some Western countries are considering, "would be an absolutely stupid decision."