FACT SHEET: Limiting Kremlin Revenues and Stabilizing Global Energy Supply with a Price Cap on Russian Oil
December 2, 2022
Following agreement by the 27 Member States of the European Union (EU), the members of the G7 (the United States, Canada, France, Germany, Italy, Japan, and United Kingdom) and Australia (collectively, the “Price Cap Coalition”) are joining the EU in adopting a price cap of $60/barrel on seaborne crude oil of Russian Federation origin. The price cap is an important tool to restrict the revenue Russia receives to fund its illegal war in Ukraine, while also maintaining a reliable supply of oil onto global markets. This policy is especially critical to make oil supplies available in low- and middle-income countries hit hard by the effects of Russia’s war.
Next week, the Price Cap Coalition will ban a broad range of services—including...
1) This Fact Sheet was issued concurrently with the ($60 Price Cap) Determination Pursuant to Sections 1(a)(ii), 1(b), and 5 of Executive Order 14071 (Effective December 5, 2022) (First PC Determination).
2) For practical compliance purposes, the Fact Sheet is notable for the statement that follows:
o Russia has multiple options to respond to the price cap. Russia can sell at or below the price cap and keep its oil flowing onto global markets, at lower prices for importers and with the benefit of best-in-class G7 services. Alternatively, Russia can rely on non-G7 service providers, which are limited in scale, more expensive, and less reliable. Given these constraints, reducing the volume of sales would not be in Russia’s economic interest, especially because doing so would mean reducing sales to key emerging markets, including Russian allies.
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