Ukraine urges G7 and EU to halve Russian oil price cap
Ukraine has called on the G7 countries and the European Union to tighten restrictions on Russia by reducing the maximum price for oil exported by sea to $30 per barrel, Deputy Foreign Minister Andriy Sybiha reported Tuesday in Brussels. Currently, the price cap is set at $60.
What do you need to know?
- Ukraine is advocating for lowering the price cap on Russian oil to $30 per barrel. The current cap is $60. This proposal was presented by Ukrainian Foreign Minister Andriy Sybiha during a meeting in Brussels.
- The price cap mechanism was introduced by the G7 and the EU in December 2022. Its goal is to limit Russia's revenue from oil exports without triggering a global energy crisis.
- The EU and the UK have announced new sanctions against Russia. These will target additional ships in the "shadow fleet," which Russia uses to circumvent sanctions.
What are the chances of lowering prices?
Sybiha participated in a meeting of EU foreign ministers within the framework of the so-called "EU27."
The price cap mechanism on Russian oil was introduced in December 2022 by the G7 and the EU to limit Kremlin's revenue from raw material exports while avoiding destabilization of the global energy market. This cap applies exclusively to maritime transport.
Despite these restrictions, Russia has circumvented them by using tankers flying the flags of third countries, often African ones. These vessels, known as the "shadow fleet," sell oil at prices above the imposed limit. The West is systematically targeting these ships with new sanctions.
On Tuesday, the European Union and the United Kingdom announced another round of restrictions aimed at including additional ships from the "shadow fleet."
London and Brussels also expressed their willingness to revisit the current price cap due to the observed decline in oil prices on global markets. According to Reuters, the European Union might propose lowering the threshold to $50 per barrel.
Ukrainian President Volodymyr Zelensky stated that he had a conversation with Ursula von der Leyen on Tuesday, during which he thanked the President of the European Commission for implementing the latest package of sanctions against Russia.
