**EU Plans to Lower Russian Oil Price Cap**
The European Union is considering reducing the price cap on Russian oil from $60 to $50 per barrel. This proposal is set to be discussed at a meeting of G7 finance ministers in Canada this week.
According to Valdis Dombrovskis, the European Economic Commissioner, the EU will suggest lowering the price cap as part of its 18th sanctions package against Russia. While Dombrovskis didn’t specify the exact new cap, officials briefed on the discussions told Reuters that it would be reduced from $60 to $50 per barrel.
**How Does the Price Cap Work?**
The price cap mechanism was introduced in December 2022 as a way to reduce Russia’s revenue for its war in Ukraine. The system prohibits Western companies from providing services such as shipping and insurance for Russian oil unless it sells below the set threshold. This aim is to limit Moscow’s income while maintaining global oil supply.
However, Russia has found ways to circumvent these restrictions by creating a “shadow fleet” of tankers operating outside Western insurance markets. Reuters reported that Russian Urals crude traded above the price cap for most of last year.
**Why Lower the Price Cap?**
The EU is considering lowering the price cap due to concerns about global economic growth following US tariff announcements. In early April, the price of Russian oil fell below the $60 threshold amid broader market worries.
Ukraine had initially requested a much lower cap of $30 per barrel when the mechanism was first introduced. The proposal to lower the price cap reflects the EU’s ongoing efforts to pressure Russia over its actions in Ukraine.
**The G7 Meeting**
The meeting of G7 finance ministers in Canada this week will discuss various issues, including the proposed lowering of the Russian oil price cap. The G7 includes key countries such as the United States, Canada, Britain, France, Germany, Italy, and Japan, with the European Commission and eurozone finance ministers’ chair also participating.
Read More @ euromaidanpress.com
