EU, allies look to strengthen Russian oil price cap, EU Commission says

EU, allies look to strengthen Russian oil price cap, EU Commission says

By Julia Payne

The European Union and 12 partner countries have met in Brussels to discuss the effectiveness of Western sanctions on Russia and ways to strengthen the G7 price cap on Russian oil, the EU Commission said on Tuesday.

The Group of Seven countries (G7), in coordination with the EU, imposed a price cap in late 2022 that blocked access to Western shipping services and insurance if the oil was purchased at over $60 a barrel, aiming to reduce Moscow's ability to finance its war in Ukraine.

The effectiveness of the measure has waned since the end of last year as Russia built up a shadow fleet of hundreds of tankers, mostly old ones at a higher risk of accidents.

Western powers, including the EU, began sanctioning vessels directly over the last year in an effort to push the trade back under the cap.

EU sanctions envoy David O'Sullivan led the meetings.

"This is the fourth time we meet in Brussels...there is more that needs to be done and relentless enforcement is where we all should focus on now," O'Sullivan said in a Commission statement.

The Commission said Russia had spent nearly half its federal budget on defence and security and that Russia was believed to be paying over 130% more for semiconductors and over 300% for machine tools via Turkey and China than before its 2022 full-scale invasion of Ukraine.

Last week O'Sullivan said the EU would look at targeting specific financial institutions and the transit of products from southeast Asia through China that are being used by Russia's military. Ukraine's presidential adviser said on Tuesday that China remained the "biggest problem".