All EU governments completed on Saturday the written approval of a $60 per barrel price cap on Russian seaborne oil, the European Commission said.
It paves the way for its publication in the EU's official journal, to come into force on December 5.
The measure, an idea of the Group of Seven nations, comes on top of the EU's embargo on imports of Russian seaborne crude that also takes effect on December 5, and is meant to allow oil-related services to third countries only for those cargoes below the cap.
“The G7 and all EU member states have taken a decision that will hit Russia's revenue even harder and reduce its ability to wage war in Ukraine,” European Commission President Ursula von der Leyen said.
“It will also help us to stabilise global energy prices, benefiting countries across the world who are currently confronted with high oil prices.”
The price cap will prohibit G7 companies from dealing with the insurance, reinsurance or financing of oil trade or handling of Russian crude oil cargoes to third countries unless the oil was sold at or below the $60 per barrel price cap.
The Russian Urals crude closed trade on Friday at $67.44.
From Monday, the EU itself will not be buying any Russian seaborne crude, which made up 94 per cent of all Russian crude imports by the 27-nation EU before the invasion of Ukraine.
The bloc will also stop any imports of Russian petroleum products from February 5. A G7 price cap on the petroleum products will also be set at a later date, using exactly the same mechanism as for crude oil, the Commission said.
From Monday, EU shipping companies will only be allowed to carry Russian crude if it is sold below or at the G7 price cap, which will be reviewed every two months, starting from mid-January, to keep it at least 5 per cent below the market price.
Because the world's key shipping and insurance companies are based in G7 countries, the price cap would make it very difficult for Moscow to sell its oil at a higher price.
Since the final details of the price cap are set so near to its implementation, cargoes of Russian crude loaded on to tankers before December 5 will be exempt from the restrictions for 45 days, or until January 19.
If the price cap changes after the regular review mechanism, there will be a 90-day grace period to ensure that no vessel is caught at sea carrying oil bought at a price that is not accepted.
The price cap review is an EU-specific mechanism that will require unanimity among the 27 countries that make up the bloc for any changes to the price level.
Once a change is agreed by the EU, it will be then discussed at the G7 level, which includes also the US, Canada, Britain and Japan.