Ukraine urges G7 to slash Russian oil price cap to $30
Ukraine has urged the G7 countries and the European Union to enforce stricter restrictions on Russia and reduce the maximum price of sea-exported oil to $30 per barrel, Deputy Foreign Minister Andriy Sybiha reported Tuesday in Brussels. The current price cap stands at $60.
What do you need to know?
- Ukraine is calling for the price cap for Russian oil to be lowered to $30 per barrel. Presently, the cap is $60. This proposal was introduced 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 aim is to curb 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 more ships from the "shadow fleet," which Russia uses to evade sanctions.
What are the chances of lowering prices?
Sybiha attended a meeting of EU foreign ministers within the framework of the so-called "EU27."
The price cap mechanism on Russian oil was implemented in December 2022 by the G7 and the EU to limit the Kremlin's revenue from exporting raw materials without destabilizing the global energy market. It applies exclusively to maritime transport.
Despite this, Russia effectively bypasses these restrictions by using tankers flying flags of third countries, mainly African ones. These vessels, known as the "shadow fleet," sell oil above the imposed limit. The West systematically targets them with new sanctions.
On Tuesday the European Union and the United Kingdom announced another round of restrictions aimed at covering additional ships in the "shadow fleet."
London and Brussels also expressed their willingness to review the current price cap due to the observed decline in oil prices in the world markets. According to Reuters, the European Union may suggest lowering the threshold to $50 per barrel.
Ukrainian President Volodymyr Zelensky said he had a conversation with Ursula von der Leyen on Tuesday, thanking the President of the European Commission for implementing the latest package of sanctions against Russia.
