The United Kingdom has called on the G7 countries to agree to lower the price cap on Russian oil, saying that this step is necessary to increase pressure on Kremlin leader Vladimir Putin to end the war against Ukraine.

Source : Bloomberg

Details : "Pressure on Russia’s war machine is needed now more than ever," the UK Treasury said in a statement. "Putin has failed to engage in good faith with proposals from Zelenskyy to meet directly and attempts to broker a ceasefire from his illegal and brutal war".

The G7 countries – the UK, the US, Germany, France, Italy, Canada and Japan – are looking for ways to tighten the current price cap to limit Moscow's ability to finance the war.

The threshold is currently set at US$60 per barrel. Under the rules, Western companies can only insure and transport Russian oil if it is sold below that level.

UK Chancellor of the Exchequer Rachel Reeves said that "an ambition to move quickly in lowering the US$60 price cap on Russian crude oil at this opportune time". She also called on G7 partners to unite in their efforts to achieve "a just and lasting peace".

In response to Western restrictions, particularly price caps and embargoes by the US and EU, Russia has created a shadow fleet of tankers, often operating with unknown owners and insurers, which supplies oil to new markets, mainly in Asia. This has allowed Russia to partially circumvent the sanctions.

Background :

• Ukraine has proposed that the EU increase pressure on Russia by lowering the cap on Russian oil to US$30 per barrel.
• The EU will propose to the G7 that the current cap (US$60 per barrel) on Russian oil transported by sea be lowered. According to Reuters, the European Union will propose US$50 per barrel.

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