Oil drops 4% as the EU considers capping Russian oil prices between $65-$70, with the bloc split on the potential move

• Oil prices fell Wednesday following reports the European Union is thinking about capping Russian oil prices at $65-$70 a barrel.
• The Group of Seven nations has been working on a price cap since Russia's invasion of Ukraine.

Oil prices retreated Wednesday following reports the European Union is thinking about putting a price cap of $65-$70 a barrel on Russian oil, a range that some officials have deemed as too high.

Brent crude, the international benchmark, lost 4% at $84.86. West Texas Intermediate crude fell 4.2% to $77.55 per barrel.

The price cap is meant to provide a carve-out in the EU's December 5 ban on seaborne Russian oil imports and related services worldwide. Backers hope to keep Russian supplies flowing to global markets, preventing a price shock while limiting Moscow's export revenue.

EU ambassadors were meeting Wednesday to discuss the cap, which was first proposed by the Group of Seven after Russia's invasion of Ukraine.

The $65-$70 range is in line with the historical average before Russia launched its war against Ukraine in late February. But an EU diplomat told Reuters that Poland, Lithuania, and Estonia consider it too high and instead want the price set at the cost of production, meaning Russia wouldn't earn a profit.

A group of EU countries including Poland and the Baltic states are seeking a new package of EU sanctions on Russia to compensate for the watered-down plan, Bloomberg reported.

As Western customers shun Moscow, Russia has been selling its crude at a discount, which some analysts have estimated is already below the proposed price cap.

Meanwhile, "Cyprus, Greece and Malta find it too low, because of the risk of more deflagging of their vessels, which might mean the G7 has found a good middle-ground," Reuters quoted a diplomat as saying.