Denmark, Estonia, Finland, Latvia, Lithuania, and Sweden have called on the European Union to review and tighten the price cap on Russian seaborne oil, which was set at $60 per barrel in late 2022 and has remained unchanged since then.
The Nordic and Baltic nations have urged the European Commission to prioritize the revision, stressing that sanctions must be continuously strengthened to hinder Russia’s ability to fund its war in Ukraine. The foreign ministers of the six countries argued in a joint letter, seen by Euronews, that oil export revenues are a key income source for Russia and should be targeted more effectively.
The letter, dated January 11, was addressed to European Commissioner for Financial Services Maria Luís Albuquerque and High Representative Kaja Kallas. The countries stated that it is time to increase the impact of sanctions by lowering the G7 oil price cap.
The G7 introduced the price cap in 2022 to restrict the seaborne trade of Russian crude oil. Under the cap, Western companies are prohibited from offering services—such as insurance, financing, and flagging—to Russian tankers selling oil above the price limit. In addition to the $60 per barrel cap on crude oil, the G7 set two other price caps for oil products: $100 per barrel for premium products and $45 per barrel for discounted products.
Despite fluctuations in Russian oil trade and reports of sanctions evasion, the caps have remained in place without change. To bypass restrictions, Russia has created a “shadow fleet” of older tankers with obscure ownership and insurance structures. These tankers have been accused of using deceptive tactics, such as falsifying data, disabling transponders to avoid satellite tracking, and conducting ship-to-ship transfers to hide the oil’s origin. These practices have raised concerns about environmental risks.
According to the Centre for Research on Energy and Clean Air (CREA), just 36% of Russia’s seaborne crude oil in December was transported by tankers affected by the G7 price cap. The rest was carried by the “shadow fleet.”
Urals oil, Russia’s main export, has consistently exceeded the G7 price cap, trading between $64 and $84 per barrel in the past year. The primary buyers of this oil are China and India, further complicating efforts to enforce the price cap.
The six countries argue that the global oil market is more stable now than in 2022, and the risk of a supply shock, which had been a concern during the initial price cap negotiations, has significantly reduced. They also point out that Russia’s reliance on energy exports to support its war economy means it has no choice but to continue exporting oil, even at a lower price.
The letter does not specify a new price for the cap but suggests that a lower price could have significantly reduced Russia’s oil revenue. CREA estimates that a $30 per barrel cap, implemented from the start, would have led to a 25% drop in Russia’s oil export revenue, amounting to €76 billion in losses.
The Nordic and Baltic states have also called for an expansion of sanctions against the “shadow fleet” and those involved in evading the price cap. So far, the EU has sanctioned 79 vessels linked to this fleet.
In response to the letter, a European Commission spokesperson stated that the request will be considered in ongoing discussions. However, the spokesperson emphasized that any changes to the cap would require the unanimous approval of all 27 EU member states and would ultimately be a decision for the G7.
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