Canada aligns with allies to lower Russian oil price cap
Canada announced on Aug. 8 that it will join allies in lowering the price cap on Russian oil in response to Russia's ongoing war in Ukraine.
The news follows the EU statement on implementing a new dynamic ceiling on Russian oil prices beginning Sept. 3 as part of its 18th sanctions package against Moscow. The revised cap — $47.60 per barrel — replaces the static $60-per-barrel limit introduced by the G7 in December 2022.
"By further lowering the price cap on Russian crude oil, Canada and its partners are ratcheting up the economic pressure and limiting a crucial source of funding for Russia's illegal war," said Canadian Finance Francois-Philippe Champagne.
"Our government has been a steadfast ally to Ukraine, and we will continue to support them in defending their territorial integrity, sovereignty, and peace for its people," Champagne added.
The price ceiling is designed to slash Russia's energy revenue without triggering a supply shock. It applies to EU and G7 companies providing services such as insurance and shipping for Russian oil shipments, which are permitted only if the crude is sold at or below the cap.
The U.K. earlier joined the EU in backing the revised cap, aligning with Brussels' move to deepen pressure on the Kremlin. Oil and gas revenues are critical to the Kremlin's war budget, accounting for nearly one-third of federal income.
Yet, President Volodymyr Zelensky urged cutting the Russian oil price cap from $60 to $30 per barrel to pressure Moscow to declare a ceasefire.
"Each of the partners knows what price cap is needed — $30, no higher. Such a price level will mean real pressure on Russia — they should be forced to seek peace," Zelensky said on June 10.
