European countries call on G7 to lower price ceiling for Russian oil
Photo: Russian oil prices should be reduced, EU says (Getty Images)
Six EU countries have called on the European Commission to lower the price ceiling for Russian oil set by the G7 countries at $60 per barrel. This would reduce Moscow's revenue to continue the war in Ukraine without causing a market shock, Reuters reports.
“Measures that target revenues from the export of oil are crucial since they reduce Russia's single most important income source,” Sweden, Denmark, Finland, Latvia, Lithuania, and Estonia said in a letter to the EU executive.
The statement says that now is the time to further strengthen the impact of the sanctions by lowering the ceiling on oil prices in the G7 countries.
The price ceiling for the G7 countries was set at $60 per barrel for Russian crude oil, and for oil products at a maximum of $100 per barrel for premium oil products and $45 per barrel for other oil products.
These maximum prices have remained unchanged since December 2022 and February 2023, when they were introduced, while Russian crude oil prices on the market were on average below this level in 2023 and 2024.
“The international oil market is better supplied today than in 2022, reducing the risk a lower price cap will cause a supply shock. In view of limited storage capacity and its outsized dependence on energy exports for revenue Russia has no alternative to continue oil exports even at a substantially lower price,” the letter says.
The G7 countries have imposed price restrictions on Russian oil transported by sea, as well as on oil products, to limit Moscow's oil revenues and thus limit its ability to finance the invasion of Ukraine.
On January 10, the United States announced new large-scale sanctions against the Russian energy sector, including the largest oil company Gazprom Neft and Surgutneftegaz. This was done in order to prevent Moscow from continuing its war with Ukraine by depriving it of billions of dollars a month.
