Most countries in the Group of Seven (G7) are prepared to lower the price cap on Russian oil without the support of the United States. According to four people familiar with the matter, the European Union, the United Kingdom, Canada and Japan are inclined to lower the current cap of $60 per barrel to $45 to further limit Russia’s energy revenue. Although the United States has not made a clear statement yet, European countries hope to reach a consensus decision at the G7 summit this week. The US Treasury Secretary was previously skeptical about the necessity of adjusting the ceiling, but some senators such as Lindsey Graham expressed support for tougher sanctions.
The European Union has proposed in its 18th round of sanctions proposals to lower the price cap to $45, but it requires unanimous approval from member states. At present, the price of Russian Urals crude oil has fallen below the international benchmark, and the futures price of Brent crude oil has also remained below $70 per barrel since April. Sources pointed out that even if the United States does not participate, the European Union and the United Kingdom, relying on their influence in shipping insurance and tanker regulation, can still push for the implementation of the new cap. However, the cooperation of the United States is still crucial for oil transactions settled in US dollars.
Recently, the crackdown by Western countries on Russia’s “shadow tanker fleet” has begun to bear fruit. The profits of Rosneft dropped by 14.4% last year. The G7 countries hope to force more Russian oil trade back into the controlled system by lowering the price cap, further weakening their ability to finance the war.
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