The new cap will be $47.6 per barrel, down from the current $60. UK officials expect the change to hit Russia’s oil revenues, which are already down 35% from last year.
“As [Russian dictator Vladimir] Putin continues to stall on serious peace talks, we will not stand by,” the statement quoted Foreign Secretary David Lammy.
“That’s why we’re striking at the heart of the Russian energy sector alongside the EU. Together we will continue to apply relentless pressure on Putin, squeezing his critical oil industry and cutting off funding for his illegal war in Ukraine.”
The price cap is enforced by banning any companies in G7 countries from offering transportation or insurance services to vessels carrying Russian oil to be sold at a higher price. Western companies still dominate the maritime shipping insurance market, which forces Moscow to rely on the so-called “shadow fleet” of uninsured tankers, which are often hit by targeted sanctions.
London said companies have until Sept. 2 to comply with the new rules.
Earlier on July 18, the European Council approved the 18th package of sanctions against Russia. The package includes a ban on any contracts related to the Nord Stream gas pipelines and lowers the price cap on Russian oil from $60 to about $47 per barrel. Under the same package, the EU revoked permission for Czechia to purchase Russian oil.
Ukrainian President Volodymyr Zelenskyy welcomed the new sanctions, saying they further constrict Russia’s oil revenues and access to financing.
Meanwhile, EU officials said they are already working on a 19th sanctions package.