According to Reuters, European Economic Commissioner Valdis Dombrovskis said that the European Union (EU) will propose that the G7 reduce the price ceiling for Russian crude oil transported by sea to $50/barrel, 10% lower than the current level. The proposal will be made at a G7 Finance Ministers' meeting held in Canada this week.
"This is something we have suggested in the context of building an 18th package of sanctions against Russia. I believe that the G7 partners will be interested and have further discussions," said Mr. Dombrovskis.
This price cut is considered the next step in the efforts of the EU and Western countries to tighten budget revenue from oil - an important resource for Russia to maintain its military campaign in Ukraine.
From December 5, 2022, the EU will officially ban imports of Russian crude by sea. At the same time, the G7, EU and Australia imposed a price cap of $60/barrel for oil transported by ship from these countries. Russian refined oil products have also been subject to a similar monopoly since February 2023.
However, nearly a year and a half have passed, and oil prices on the world market have fluctuated, causing the current price ceiling to be considered "not press enough". Russia is said to have sought to evade sanctions by using a "shadow fleet" of oil tankers of unknown origin that are not insured by the West.
The proposal to reduce the price cap to $50/barrel is considered one of the "opening rounds" for the 18th package of sanctions that the EU is starting to build.
Just a few days earlier, Finnish Foreign Minister Elina Valtonen said that the EU was finalizing the 17th package of sanctions and immediately started the new package.
Experts say that lowering the oil price ceiling is not only economic but also a political move to show determination to "not retreat" against Russia, especially when the conflict in Ukraine has not ended.
However, reaching a consensus in the G7 group on reducing the ceiling is not easy. Some G7 countries are partially dependent on oil and gas, so they are still cautious about side effects on the global energy market.
In addition, some analysts warned that continuing to lower the price cap could cause Russia to cut export output sharply, causing supply fluctuations and pushing global oil prices up again - something that Western countries do not want in the context of unstable economy.
