The European Union and the UK oil are insisting on reducing the cap price hat – a major economic approval against Russia.
The price cap is currently set by oil barrels on $ 60 (€ 52.7) and is from December 2022. Its commission means shipping and insurance services from the G7 group of advanced economies, which dominate global shipping, are not provided for transit of Russian oil until the oil is sold at or at the level level.
The European Union is currently working on the 18th package of sanctions against Russia, which has released its 17th package earlier this week. European Commission Chairman Ursula von Der Leyen has confirmed that the European Union and Britain were expecting to convince their G7 partners to reduce the oil price cap for the next package.
European Commission spokesman Olof Gill told DW that the discussion on the price cap was going on with the G7 partners and confirmed that the cap wild needs to be any low. The European Union has not publicly stated that at what level it believes the cap should be replaced, but various reports have suggested $ 50.
Brent crude, a global benchmark, has recently traded around $ 65 through barrels, while Russian oil has traded below the cap between $ 55 and $ 59 in April and May.
The idea behind reducing the CAP is to reduce the amount of Moscow which makes sebourne from its legitimate sale of crude oil. The price of oil has fallen rapidly during 2025, and Brent crude now has only one flow dollar from the price cap of only $ 60.
We are hesitant ‘disappointing’
The G7 Finance Minister met in Canada last week (20-22 May), where the reduction of the cap was discussed. They released one statement Russia’s choice of “constant cruel war” and said that if efforts to achieve a ceasefire failure, they would find out “enhancing restrictions”.
However, the Reuters of the news agency quoted an anonymous European officer in the talks, stating that the US is “not convinced” about reducing the price cap and the falling oil prices are already harming Russia.
Since the onset of the war in 2022, there is uncertainty on the possibility of disrupting uncertainty on oil restrictions in both the European Union and America and increasing the possibility of increasing energy prices for their own consumers.
Yulia Pawatska, the manager of the restriction program at Kiev School of Economics, told DW that the trump administration’s hesitation on the restrictions “disappointment”, but he appreciated for continuing the action of both the European Union and Britain.
They believe that the Russian economy is currently uniquely weak, and now it is a time of more decisive action.
“The cumulative imbalance caused by restrictions and war, together with the falling oil prices, is now reaching a critical point,” he said. “This is why we believe that our partners should seize this moment and intensify restrictions efforts to take advantage of Russia’s growing weaknesses.”
Regardless of level, the price cap should be better applied
A major focus of recent restrictions packages is to deal with aging tankers of the so-called shade fleet-bundles of Russia that to expel tankers purchased by Moscow out of the price cap. The vessels are particularly specialty through the third parties and then the oil is transported worldwide using opaque or illegitimate insurance schemes.
The Biden administration began to approve individual tankers with joining the European Union and the UK. Now, over 700 tankers have been approved, but the US has not approved any SionD Trump returned as US President.
Recent data shows that the approval of tankers has forced Russia to use its mainstream fleet more and moreWhich means legal obligation to follow the price cap. Experts have said that there is urgency of the need to reduce it.
“Excessive Russian oil is being taken on G7 insurance,” Vaibhav Raghunandan from the research center in research and clean air for the Center told DW. “So it looks like the right time to reduce the hat and react to it.”
However, he and others who are closely monitoring the restrictions on the previous fieres have stated that the biggest issue with the price cap is not only value, but is enforcement.
Raghunandan said, “Current enforcement measures are not even marks,”
The broad “attachment woman” in relation to the cap is, that is, tanker, oil with wrong paperwork, has been sold in compliance where the cap was sold when it was sold.
Raghunandan explained, “Verification documents are basically to be filled by traders themselves, but bank statement is not verification.” “All this value needs to be replaced for the batter enforcement of the cap ittself. You can place the price cap on one dollar per barrel if you want, but if you can’t apply it, it has no meaning.”
Patska agrees, saying that reducing the cap “will not reduce Russia’s revenue until we ensure that business is held in compliance with it.”
Both Patska and Raghunandan agree that Russian oil buyers should fall the responsibility of providing reliable pricing data, rather than that they are transporting it, as in the present.
Oil price dip leaves the Russian economy weak
Patska underlined that the entire point has to reduce the amount of revenue from its oil, “to reduce its ability to finance war in Ukraine.” She strongly believes that the price of falling oil, which represents a major change from strong prices in 2023 and for 2024, gives Ukraine colleagues a clear opportunity to seriously break the Russia’s economy.
In his opinion, options to completely restrict the export of Russian oil should be considered along with reducing the price cap. With the global market now on the “strong down trend”, the coalition of restrictions near the wood “has more decisive steps, which includes measures that will restrict the supply of Russian oil.
“This can finally push Russia’s energy revenue to an important painful level,” he said.
Edited by: Uwe Hessler
