**EU Seeks to Cut Russian Oil Revenue, Proposes Lower Price Cap**
The European Union is planning to propose a reduction in the price cap on Russian oil exports at this week’s meeting of G7 finance ministers. The move aims to further limit Moscow’s revenue from fossil fuel sales, which fund its ongoing war against Ukraine.
According to European Economic Commissioner Valdis Dombrovskis, the EU will formally raise the issue during the meeting in Canada. This proposal is part of the 18th sanctions package, and officials expect other G7 partners to show interest in discussing it.
**Why a Lower Price Cap?**
The current $60-per-barrel cap on Russian seaborne oil exports has been in place since December 2022. However, Western leaders believe that Russia has found ways to bypass the cap by using a “shadow fleet” of tankers operating outside regular maritime oversight. This enables Moscow to sell oil above the threshold, including to countries in Asia.
By lowering the price cap to $50 per barrel, the EU hopes to reduce Russia’s revenue from fossil fuel exports and make it harder for the Kremlin to fund its military campaigns.
**A Strained Russian Budget**
The proposal comes as Russia’s budget is under increasing strain due to soaring military expenditures. The Finance Ministry relies heavily on energy revenues to maintain operations and continue aggression against Ukraine. By reducing the price cap, the EU aims to put further pressure on Moscow’s finances and limit its ability to fund the war.
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