The United States has been opposing a G7 countries initiative to lower the price cap on Russian oil, complicating efforts by the EU and the United Kingdom to use this tool to increase pressure on Russia.

Source: Bloomberg

Details:Bloomberg reported that the US is against lowering the price cap on Russian oil, which dampens European leaders' hopes that an agreement to reduce the price will be reached at the upcoming G7 summit in Canada.

Quote: "A final decision rests with President Donald Trump and officials haven’t lost all hope, according to the people, who asked not to be identified discussing private deliberations. But so far there’s no movement from the position that the US spelled out at a meeting of G-7 finance ministers earlier this year."

Details: The European Union and the United Kingdom are in favour of reducing the price cap from the current US$60 to US$45 per barrel, thereby cutting Russia's oil revenues that it uses to fund its war against Ukraine.

According to one of Bloomberg sources, the EU and the UK may consider lowering the price cap without US participation.

Quote: "Most of Russia's oil is transported near European waters so going it alone might have some effect. But an accord involving all G7 nations would be more effective as it would be able to rely on US enforcement."

Background: 

• The draft of the EU’s 18th package of sanctions against Russia includes a proposal to reduce the price cap on Russian oil from US$60 to US$45 per barrel.
• Ukraine called on the European Union to lower the price cap on Russian oil to US$30 per barrel.
• The European Union acknowledged that even if the United States does not agree to a further reduction of the oil price cap, the EU can still implement such a measure on its own.

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