G7 Price Cap Mechanism on Russian Oil
The G7, EU, and Australia introduced a price cap on seaborne Russian crude oil exports, initially set at $60 a barrel with effect from 5 December 2022. Rather than an outright import ban, the cap works by prohibiting G7-based shipping, insurance, and reinsurance firms — which dominate global maritime services — from handling any cargo of Russian oil sold above the capped price, leveraging the G7's grip on maritime infrastructure to constrain Russian export revenue while keeping global oil supply largely intact.
- The cap was lowered to $47.60 a barrel effective 3 September 2025 as part of a fresh EU sanctions package; the United States did not join this reduction
- From January 2026, a dynamic mechanism replaced the fixed cap, setting the price 15% below the trailing 22-week average price of Urals crude (most recently around $44.10 a barrel)
- The mechanism's stated dual objective is to deprive Russia of oil revenue while avoiding a global supply shock that would spike prices for all importing countries, including India
● Tracked since August 08, 2026 · last seen September 16, 2026 · updates as the daily brief publishes
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