G7 and Australia expand Russian oil price cap to petroleum products, further reducing Russia’s revenues

News release

February 3, 2023 - Ottawa, Ontario - Department of Finance Canada

Today, Canada, our G7 partners, and Australia are moving forward with two price caps for seaborne Russian-origin petroleum products, which build on the Russian crude oil price cap announced on December 2, 2022. Together, these price caps will further weaken Putin’s ability to fund his illegal and barbaric war against Ukraine.

As of February 5, 2023, the maximum price for seaborne Russian-origin petroleum products will be US$100 per barrel for “premium-to-crude” products, and US$45 for “discount-to-crude” petroleum products.

These two additional price caps will be enforced in the same manner as the crude oil price cap: by prohibiting buyers who do not abide by the price caps from obtaining services, like shippers’ insurance, from companies in any of the Coalition countries (G7 partners and Australia).

The price cap mechanism has been carefully designed to reduce Russian revenues and limit Russia’s ability to fund its war against Ukraine, while also recognizing the importance of stable energy markets and minimizing negative economic impacts. The Coalition will continue to enforce, monitor, and adjust the price caps to ensure their effectiveness.

Quotes

“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.”

- The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

Quick facts

  • According to the International Energy Agency January Oil Market Report, Russian oil exports fell by 200,000 barrels per day month-over-month in December (to 7.8 million barrels per day), as crude shipments to the EU declined after the EU crude embargo and the Coalition price cap came into effect. Record discounts for Russian benchmark Urals grade also saw Russian revenues slip by US$3 billion month-over-month to US$12.6 billion.

  • Canada is a net exporter of crude oil, meaning it exports more than it imports each year. Canada does not import crude oil from Russia.

  • The Government of Canada has already disbursed $2.45 billion in direct financial assistance to Ukraine since the beginning of Russia’s illegal invasion, and has also committed more than $2.5 billion in military, humanitarian, and other assistance to Ukraine, bringing Canada’s total commitment to more than $5 billion.

  • On March 24, 2022, the Government of Canada announced that, in response to requests from our allies to address supply shortages resulting from Putin’s illegal war, Canadian industry would incrementally increase oil and gas exports in 2022 by up to 300,000 barrels per day (200,000 bbl/d of oil and up to 100,000 BOE/d of natural gas), with the intention of helping to displace Russian oil and gas while not increasing global emissions.

Related products

Contacts

Media may contact:

Adrienne Vaupshas
Press Secretary
Office of the Deputy Prime Minister and Minister of Finance
Adrienne.Vaupshas@fin.gc.ca

Media Relations
Department of Finance Canada
mediare@fin.gc.ca
613-369-4000

General enquiries

Phone: 1-833-712-2292
Facsimile: 613-369-4065
TTY: 613-369-3230
E-mail: fin.financepublic-financepublique.fin@canada.ca

Stay Connected

Twitter: @financecanada

RSS

Search for related information by keyword: Finance | Department of Finance Canada | Canada | Money and finances | general public | news releases

Page details

Date modified: