EU Considers Maintaining G7 Price Cap on Russian Oil Amid Rising Tensions

The European Commission may keep the G7 price cap on Russian oil during its July review to limit Russia's gains from the Iran conflict and prevent an oil price shock. The EU's idea is part of the 21st sanction package against Russia, aiming to sustain pressure while managing global oil prices.

The European Commission is contemplating maintaining the current G7-imposed price cap on Russian oil in its forthcoming sanction review, as per EU diplomats cited on Monday. The strategy aims to restrict Moscow's financial advantages due to the Iran war while avoiding an international oil price surge.

The proposal emerged in meetings over the weekend with EU envoys, intending to be a crucial component of the 21st sanctions package against Russia for its ongoing conflict in Ukraine. The G7 set a dynamic price cap last year to enhance efficacy, initially cutting it to $44.10 per barrel in January.

While up to 30% of Russian seaborne oil complies with the cap, the remainder is traded via a 'shadow fleet.' The European Commission seeks to sustain pressure on Russia, potentially proposing that future reviews of the price cap should not exceed $60 per barrel, despite current Brent oil projections nearing $90.