Ukraine is urging the G7 to slash the price cap on Russian oil to $30 per barrel, down from the current $60, in a bid to tighten the financial screws on the Kremlin as its war drags into a third year.
Foreign Minister Andriy Sybiha made the case in Brussels on Tuesday, saying the current cap is too lenient now that global prices have slipped and Russian barrels are already trading below the ceiling. “From our point of view,” he said plainly, “the reasonable price cap is 30 dollars.”
The ask comes just as the EU and UK rolled out fresh sanctions targeting Russia’s so-called shadow fleet and financial firms helping Moscow dodge earlier measures. The EU has already floated a lower cap—$50 is under discussion—but Ukraine clearly wants to cut deeper.
The timing might be ideal. Russian oil revenues are already gasping for air, falling to $13.2 billion in April, the lowest in nearly two years. The average price of Urals crude was $55.64, comfortably below the current price cap, and now flirting with unsustainable. Russia’s own finance ministry has had to revise down oil and gas revenue expectations and triple its 2025 budget deficit projection.
Still, dropping the cap even further could prove tricky. While the mechanism technically only allows Russian oil to use Western insurance and financing below the set price, enforcement has always been a murky business. Lowering it to $30 might increase pressure, but could also push more barrels into the gray zones of global trade—or back into shadow tankers.
Ukrainian President Zelensky is betting more economic pain will force Moscow to negotiate. “The more pressure there is,” he said Tuesday, “the more motives Moscow will have to move towards real peace.”
If history’s any guide, Russia’s oil trade is unlikely to go down without a fight—or a workaround.
By Julianne Geiger for Oilprice.com
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