A majority of countries in the Group of Seven (G7) nations are prepared to lower the price cap on Russian oil, even if US President Donald Trump won’t support the move, four sources familiar with the matter told Reuters.
The cap is aimed at curbing Russia’s ability to finance its military operations against Ukraine.
Moscow is pouring hundreds of billions of dollars into its war in Ukraine. Oil and natural gas sales account for about a third of Russia’s federal budget revenues, which are financing a 25% rise in defense spending this year to levels not seen since the Cold War.
G7 country leaders are due to meet on June 15-17 in Canada, where they will discuss the price cap first agreed upon in late 2022, following Moscow’s full-scale invasion of Ukraine.
The cap was designed to allow Russian oil URL-E to be sold to third countries using Western insurance services provided the price was no more than $60 a barrel.
The European Union and Britain have been pushing to lower the price cap for weeks after a fall in global oil prices, making the current $60 cap nearly irrelevant.
Europe eyes $45 cap
The sources, who declined to be named, said the EU and Britain are ready to lead the charge and go at it alone, backed by the other European G7 countries and Canada.
They said it is still unclear what the US will decide, though the Europeans are pushing for a united decision at the meeting. Japan’s position also remains uncertain, they said.
“There is a push among European countries to reduce the oil price cap to $45 from $60. There are positive signals from Canada, Britain and possibly the Japanese. We will use the G7 to try to get the U.S. on board,” one of the sources said.
Trump wary, Congress more willing
Asked about Trump’s support for a Russian oil price cap, a White House official said the president looks forward to a “robust discussion on key economic and geopolitical issues.”
During the G7 finance ministers meeting in the Canadian Rockies last month, U.S. Treasury Secretary Scott Bessent remained unconvinced there was a need to lower the cap, according to sources.
However, some US senators may endorse the idea, including Sen. Lindsay Graham, who told reporters he supports lowering the cap in recent weeks. Graham is pushing a hard-hitting new set of Russia sanctions that could impose steep tariffs on buyers of Russian oil.
The EU and its Western allies have been progressively cracking down on Russia’s shadow fleet of tankers and related actors, which work to circumvent the cap.
The pressure has started to hurt Moscow’s revenues and Western allies hope this will push more of the oil trade back under the cap. Russia’s state-owned oil producer Rosneft reported a 14.4% profit slump last year.