G7 and Australia Expand Sanctions On Russian Seabourne Oil

The G7 countries of Canada, Australia and its partners have taken a bold step in their efforts to curb the funding of Russian aggression towards Ukraine. The two price caps on seaborne Russian-origin petroleum products announced on February 5, 2023, are a direct response to the Russian crude oil price cap that was imposed on December 2, 2022. These measures aim to weaken Russian President Vladimir Putin’s ability to finance his illegal and inhumane actions against Ukraine.

“Ukraine can and must win this war. Canada and our partners will continue to do everything we can to cut off or limit the revenue streams that are used to fund Putin’s illegal and barbaric invasion of Ukraine. We have already seen a decline in Russian oil revenues since the first price cap came into effect, and these additional price caps will be another blow to Putin’s war chest.” Said Chrystia Freeland, Deputy Prime Minister and Minister of Finance

The new price caps are significant, with the maximum price for “premium-to-crude” petroleum products set at US$100 per barrel and US$45 for “discount-to-crude” products. These restrictions will have a real impact on Putin’s ability to fund his military operations, as Russia is believed to earn around $12.6 billion U.S. per month from the sale of oil.

However, it is important to note that these measures will not completely halt Russia’s funding, as the country’s oil industry is a significant contributor to its economy. Nevertheless, the price caps are a clear signal to the international community that the G7 countries are committed to standing with Ukraine and will not tolerate the actions of the Kremlin.

The new price caps on seaborne Russian-origin petroleum products are a significant development in the ongoing efforts to curb the funding of Russian aggression towards Ukraine. Although they may not completely halt the flow of funding, they are a clear signal to the international community that the G7 countries are committed to taking action and standing with Ukraine.