Will the EU’s oil price cap hurt Russia?

The EU’s import embargo of Russian oil – which comes into force today – plus a price cap on non-EU seaborne exports is intended to hit Russia without damaging the West. It sounds too good to be true, and it probably is.

First, there’s the price cap level itself. Originally, the EU had wanted to push for a more comprehensive ban on maritime shipping insurers providing any coverage to vessels carrying Russian oil. But this frightened the US, so what we’re left with is the cap. The final figure, which the EU agreed on at the end of last week, is $60 (£49) per barrel.

But this is not much less than the $65-70 (£52-57) per barrel that Urals crude, the benchmark for Russian oil, is currently trading at (though working out how much Russian oil actually changes hands for is not that straightforward).