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 and reduce the maximum price of oil exported by sea to approximately $30 per barrel, Deputy Foreign Minister Andriy Sybiha reported on Tuesday in Brussels. Currently, the price cap is set at around $60.
What do you need to know?
- Ukraine is calling for the price cap for Russian oil to be lowered to approximately $30 per barrel. Currently, the price is around $60. The proposal was presented by Ukrainian Deputy 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 limit Russia's revenue from oil exports without causing a global energy crisis.
- The EU and the UK have announced new sanctions against Russia. These will target additional ships from 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 the Kremlin's revenue from raw material exports without destabilising the global energy market. It applies exclusively to maritime transport.
Nevertheless, Russia circumvents these restrictions by using tankers flying the 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 additional ships of the "shadow fleet."
London and Brussels also declared their readiness to revise the current price limit due to the observed decline in oil prices on world markets. According to Reuters, the European Union may propose lowering the threshold to about $50 per barrel.
Ukrainian President Volodymyr Zelensky stated that he had a conversation with Ursula von der Leyen on Tuesday and thanked the President of the European Commission for implementing the latest package of sanctions against Russia.
