UK pushes for tougher oil price cap on Russia

May 22, 2025 (MLN): The United Kingdom has urged its Group of Seven (G7) allies to agree on reducing the price cap on Russian oil, emphasizing that such a measure is crucial to intensify pressure on President Vladimir Putin to end Russia’s war in Ukraine.

The UK Treasury stated that “pressure on Russia’s war machine is needed now more than ever,” following a session on Ukraine chaired by Chancellor of the Exchequer Rachel Reeves at the G7 finance ministers’ meeting in Banff, Canada.

The G7, which includes the UK, US, Germany, France, Italy, Canada, and Japan, has been discussing ways to strengthen the existing price cap to further limit Moscow’s ability to finance its military operations in Ukraine.

Currently, the price cap is set at $60 per barrel, allowing Western operators to insure and transport Russian oil only if purchased below this threshold, as CNBC reported.

During the meeting, Reeves expressed the ambition to move swiftly in lowering the $60 price cap on Russian crude oil, calling on G7 allies to remain united in efforts to secure a just and lasting peace.

The UK statement also highlighted Russia’s refusal to engage seriously with Ukrainian President Volodymyr Zelenskyy’s proposals for direct talks and ceasefire negotiations.

In response to the price cap and broader US and EU embargoes on most Russian oil imports,

Russia has deployed a covert fleet of tankers often operating with unidentified insurers or owners to reroute crude oil to alternative markets, particularly in Asia.

This so-called shadow fleet has enabled Russia to circumvent existing restrictions.

It remains uncertain whether the G7 will reach an agreement to lower the oil price cap at the Banff meeting.

French Finance Minister Eric Lombard acknowledged that the proposal is under discussion but refrained from providing details, stating that the package is still being finalized.

The price cap was initially introduced to restrict Russia’s oil revenue without causing a spike in global oil prices.

However, with oil prices expected to fall due to a predicted global surplus in 2025, Ukraine’s allies are considering more aggressive measures to tighten the cap, according to previous Bloomberg reports.

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