**Canada Joins Allies in Lowering Russian Oil Price Cap**
In a move to further pressure Russia over its ongoing war in Ukraine, Canada has announced that it will join allies in lowering the price cap on Russian oil. This decision follows a similar announcement from the European Union (EU), which said it would implement a new dynamic ceiling on Russian oil prices starting September 3.
**A Steadfast Ally**
Canadian Finance Minister Francois-Philippe Champagne emphasized that Canada is committed to supporting Ukraine in its defense against Russia’s “illegal war”. He noted that by lowering the price cap, Canada and its partners are increasing economic pressure on Russia and limiting a crucial source of funding for the war. This move is seen as part of Canada’s broader efforts to support Ukraine’s territorial integrity, sovereignty, and peace.
**A Lower Price Cap: The Ideal Scenario**
Ukrainian President Volodymyr Zelensky has long advocated for an even lower price cap on Russian oil – specifically $30 per barrel. He believes that such a measure would put real pressure on Russia to seek peace. While Canada has joined the EU in lowering the price cap, it remains unclear whether this will be sufficient to bring about a ceasefire.
**Economic Pressure on Russia**
The price ceiling is designed to cut Russia’s energy revenue without triggering a supply shock. It applies to EU and G7 companies that provide services such as insurance and shipping for Russian oil shipments. These shipments are only permitted if the crude is sold at or below the cap. The move reflects a coordinated effort by Western countries to deepen economic pressure on Russia, which relies heavily on oil and gas revenues – accounting for nearly one-third of federal income.
**A Critical Moment**
As the war in Ukraine continues to escalate, Canada’s decision to lower the price cap on Russian oil is seen as a critical moment in the international community’s efforts to bring about a resolution. The question remains: will this move be enough to force Russia to reconsider its actions, or will it merely be another chapter in the ongoing conflict? Only time will tell.
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