EU will propose that G7 further reduce price cap on Russian oil – Reuters

This week, the EU will propose lowering the current price cap (US$60 per barrel) on Russian oil transported by sea at the G7 finance ministers’ meeting.

Source: Valdis Dombrovskis, European Commissioner for Economy and Productivity, as reported by Reuters

Details: This will be done as part of a new package of sanctions against Moscow.

"Dombrovskis did not mention the level to which the European Union would want the price cap lowered, but EU officials briefed on the discussions said the EU would propose US$50 per barrel," Reuters reports.

"Asked by reporters if he would make the proposal to lower the cap at the G7 finance ministers' meeting in Canada this week, he said: ‘Yes’," the article says.

"This is something which we flagged from the Commission's side in the context of the 18th sanctions package. I would expect some interest also from other G7 partners in this regard and some discussion," the agency quotes Dombrovskis as saying.

The G7 countries are the United States, Canada, the United Kingdom, France, Germany, Italy, and Japan. The European Commission and the head of the Eurogroup are also involved in the G7 finance ministers' meetings.

The G7 price cap, agreed upon in December 2022, bans trade in Russian crude oil transported by tankers if the price exceeds US$60 per barrel. It also prohibits shipping, insurance, and reinsurance companies from working with Russian crude oil cargoes worldwide unless they are sold at a price below the cap.

This measure was intended to reduce Russia's revenues so that it would have less money to finance the war against Ukraine, while preventing a sharp drop in global oil supplies.

"Russia has been bypassing the G7 price cap through a ‘shadow fleet’ of tankers that do not get their insurance from Western companies and Russian Urals crude has been trading above the price cap for much of the time," the agency says.

"But the price has fallen below US$60 in early April, as global concern about economic growth in the wake of US announcements on global tariffs hit oil prices as well," the publication said.

Background:

• Earlier, it was reported that in the first quarter of 2025, exports of goods from Russia fell to US$94.9 billion, which is 6.8% less than in the same period in 2024. Nevertheless, imports remained almost unchanged at US$63.1 billion (+0.1%). As a result, the foreign trade balance decreased by 17.8% to US$31.8 billion.
• The main reason for the decline is cheaper oil. According to the Russian Ministry of Economic Development, in 2024, the price of Urals crude rose from US$64.1 to US$70.3, while in 2025, it fell from US$67.7 to US$59 per barrel. As a result, exports of mineral products, which account for more than half of Russian exports, fell by 14.1% to US$55.4 billion.
• Earlier, the price of Russian oil in roubles fell below 4,000 roubles per barrel, the lowest level in two years and 40% less than provided for in the state budget.
• According to Reuters estimates, the average price of Urals and ESPO crude fell to US$48.92 per barrel, or 3,900 roubles. This is less than the figure of 6,700 roubles featured in the Russian budget.
• This is the lowest price since May 2023 and is also significantly lower than the updated government forecast of 5,281 roubles per barrel, which is used to calculate taxes.
• Due to the fall in oil prices, the Russian Federation's budget deficit has sharply increased, forcing the government to revise its financial indicators.
• US President Donald Trump said that lower oil prices are putting more pressure on Russia and increasing the chances of a peaceful deal to end the war in Ukraine.

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