Russia will seek to increase crude exports to counter the loss of revenues after a European ban on its seaborne imports and price caps for refined oil products, according to analysts.

The European Commission, the EU’s executive, has proposed two new price caps of $100 per barrel for premium oil products such as diesel and $45 for cheaper products from 5 February, according to Bloomberg.

European shipping interests and insurers would breach Western sanctions rules if oil is sold above the caps to third countries outside of the EU.

The $100 cap for diesel is significantly below current trading levels of $110 to $115 per barrel, according to the industry.

Fearnley Securities said lower prices for products could cause problems for Russian refiners in an industry in which margins are already tight.

The EU embargo could make refineries unprofitable, leading them to cut production, the Oslo-based shop said in a note. “Should this be the case, there’s a possibility that Russia will try to export more crude, we believe.”

Russia will struggle to find new buyers for the 700,000 barrels per day of diesel it exported to Europe in December, according to analysts.

Moscow has found willing buyers in India and China for its cut-price crude to fuel their thirsty refineries.

But the large scale of their own domestic refinery industries mean they are less likely to be attracted by cheaper products.

EU member states were said to be discussing the level of the new caps on Friday as the days tick down to the start of the latest measures aimed at hitting Moscow’s coffers and its ability to wage war in Ukraine.

US Treasury secretary Janet Yellen said talks were continuing between the Europeans and Americans over the size of the caps but they were still working to bring them in for 5 February.

The oil products price cap scheme is in line with similar, if simpler, measures introduced on 5 December for Russian crude oil exports.

The G7 group of nations imposed a $60-per-barrel cap on crude to mitigate the most damaging economic impact of a European ban on Russian seaborne imports, reducing Moscow’s income, while preventing a rise in global oil prices.

The import ban and cap for crude have resulted in Russian export volumes holding up but revenues being cut sharply, according to the International Energy Agency.

Shipping analysts have also reported a shift in ownership and insurance away from Europe on some routes.

Kpler's Matt Wright Photo: Rich Barr

However, a fall in the price of benchmark Urals crude to below $60 per barrel has limited the impact on shipping, as European owners are still able to haul Russian volumes to third countries outside of Europe without breaching the cap.

The G7 said the level of the caps — both crude and products — would be reviewed in March.

Many shipowners have snubbed the Russian trade anyway, leaving the field open for a limited number of predominantly Greek owners from Europe, according to trade data.

The price caps for oil products add a new layer of complexity as they are designed to cover a range of refined products.

The US Treasury, which has championed the oil cap scheme, confirmed this month that it was looking at just two price caps for the range of products.

“Just two price caps doesn’t capture the complexity and range of products and prices in the market,” said Matthew Wright, senior freight analyst at data company Kpler.

“My feeling is that it will be a bit of a blunt instrument.”