European Union diplomats are still haggling over the price at which to cap Russian crude exports, and the expectation is that they will find a number they can agree on.

But with sanctions due to start on Monday, Dec. 5, there’s an increasing urgency to get the deal done. And it raises the question: what if they can’t agree in time?

In that eventuality, planned sanctions would enter into force. It would likely be bullish for oil because those measures look much more restrictive for Russia’s exports. The price cap was designed as a kind of off-ramp from strict European sanctions, and one of its core aims is to keep Russian oil flowing. 

If talks fail, the default position is that companies would have no access to European or UK insurance when transporting Russian oil anywhere in the world. In theory at least, European oil tankers -- including the giant Greek fleet -- would be permitted to deliver barrels for Moscow. But the lack of insurance poses a massive obstacle to trade.

The cap -- proposed by the US and adopted in principle by the Group of Seven earlier this year -- aims to override and soften those measures. 

Companies will be allowed to access both shipping and insurance -- as well as other key services -- provided they can show they paid below the required level for Russian oil. Pay more and neither the Greek fleet nor European or UK insurance would be available. 

The UK matters because 95% of the cover for oil spills and collisions is routed through the International Group of P&I Clubs in London.