EU leader Ursula von der Leyen (R) met with Ireland's Micheal Martin, a signatory of the oil cap. /Clodagh Kilcoyne/Reuters
The G7 countries and the European Union have rolled out a cap on the price at which Russian crude oil can be purchased. The move is aimed at rolling back Moscow's ability to finance the war in Ukraine.
The cap began on the same day as an EU ban on the import of Russian crude oil to the bloc.
How does the price cap work?
G7 members (U.S., Canada, UK, France, Germany, Canada, Italy and Japan) and the EU member states have said the crude oil from Russia cannot be sold above $60 per barrel.
Between them, the G7 and the EU play a central role in the global shipping business. Companies based in G7 countries provide insurance services for 90 percent of the world's cargo. The world's largest oil shipping company is Japanese, while Greece has the world's largest merchant navy fleet.
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This means Russia's ability to sell its oil around the world could be severely impeded unless it abides by the price cap, which will in turn reduce Moscow's fossil fuel profits.
How has Russia responded?
Russia has said it will not accept the price cap, with Kremlin spokesperson Dmitry Peskov saying that Moscow would conduct a rapid analysis of the cap and draw up a response.
Mikhail Ulyanov, Moscow's ambassador to international organizations in Vienna, also confirmed that Russia would not provide oil to countries enforcing the price cap.
While Russia's largest oil buyers, China and India, have not committed to the price cap, Moscow will need to find a way around the fact that most oil tankers rely on Western insurance to cover their journeys. Russia has been working on providing its own alternative insurance company, though this has not yet been recognized by China and India.
Why a cap on top of an EU ban?
The price cap is designed to go further than the EU's ban on crude oil imports. Although Brussels has made it impossible to bring Russian crude oil into the bloc, the price cap is designed to hinder Moscow's fossil fuel profits on the global market, as the bloc looks at new ways to restrict Moscow's finances while the war in Ukraine continues.
What's the criticism?
Hawkish European member states like Poland and the Baltic states have said the cap is too high and won't be sufficient to seriously hinder Russia's ability to fund the war in Ukraine. They had previously pushed for a $30 per barrel cap.
Ukraine's President Volodymyr Zelenskyy echoed this sentiment, calling the cap "weak."
Other EU countries, like Greece, Cyprus and Malta, were concerned that a low price cap could have a damaging impact on their important shipping industries, and had pushed for a 70 dollar per barrel limit.
Despite the haggling, the cap is a significant step forward for the EU and its desire to impede Russia's war efforts in Ukraine.