The Group of Seven nations and European Union member states have agreed to impose a cap of US$100 per barrel on sales of Russian diesel to third countries as part of an effort to limit Moscow’s revenues as it seeks to fund its Ukraine invasion. The price cap mechanism is tied to an EU ban on seaborne imports of Russian refined fuels that kicks in on Sunday. The G7 said in a statement on Friday that it and the EU agreed to a US$100 a barrel level for petroleum products that trade at a premium to crude oil, including diesel. They also backed a cap of US$45 for those that sell at a discount, such as fuel oil and some types of naphtha. The coalition also agreed to delay a review of the US$60 price cap for Russian crude oil until March. It will then begin regular two-month reviews of all the cap levels, according to people familiar with the discussions, who asked not to be identified. Setting the prices requires unanimous agreement among the EU, as well as sign-off from the G7. “The caps we have just set will now serve a critical role in our global coalition’s work to degrade Russia’s ability to prosecute its illegal war,” US Treasury Secretary Janet Yellen said in a separate statement. During negations between the G7 and EU, officials had expressed concerns that setting too low a level risks causing price spikes or supply glitches in Europe. The cap on fuel prices includes a grace period until April for cargoes loaded before the cap was agreed, according to the people. The price cap measures will ban companies from providing shipping and services needed to transport the goods, such as insurance, unless the oils and fuels are bought below the agreed price thresholds. Here’s how energy-hungry China could benefit from price cap on Russian crude Benchmark diesel futures in northwest Europe have fallen in recent days, settling at US$113 per barrel on Thursday, though remain well above seasonal norms. But Russian diesel was priced at a significant discount earlier this week – about US$90 – according to a calculation by Bloomberg based on data provided by Argus Media Ltd. Price caps of US$100 and US$45 a barrel “would not severely impact Russian refiners”, consultancy Wood Mackenzie Ltd said earlier this week. Still, the consultancy expects Russian crude runs to be about 800,000 barrels a day lower this quarter than the previous one, and that the country’s diesel exports will drop by about 200,000 a day, all driven by the EU import bans. Meanwhile at a summit in Kyiv on Friday, the EU also praised Ukraine’s “considerable efforts” to start the reforms needed for joining the bloc, but urged it to go further. Corruption is a key European concern. Ukraine has widened efforts to tackle it, with high profile raids this week on an oligarch with political connections and a former interior minister. Ukrainian President Volodymyr Zelensky, who is pressing for speedy EU accession, suggested that talks could begin this year. “What exactly did we agree upon today?” Zelensky said in his traditional evening address. “There is an understanding that it is possible to start negotiations on Ukraine’s membership in the European Union this year.” But the path to joining the EU could take years. European Commission president Ursula von der Leyen cautioned that the process was merit-based and there could be “no rigid timelines” on either negotiations or membership itself. For now, the EU says it will do more to divert Russia’s frozen assets for use to compensate Ukraine for damage inflicted since the invasion. Brussels also plans to roll out a new package of sanctions on the first anniversary of the war, on February 24. Additional reporting by Agence France-Presse