The European Union and the G7 countries (+ Australia) have introduced a price cap on maritime Russian crude oil exports, which is set at US$60/barrel and came into effect on 5 December 2022. The crude oil price cap will be followed by a similar measure, this time affecting Russian petroleum products exports, which is expected to be implemented on 5 February 2023.
The measure allows Russian oil to be shipped to third-party countries using G7 and EU tankers, insurance companies and credit institutions, only if the cargo is bought at or below the implemented price cap. In response, Russia has declared that it will not abide by the measure, even if it must reduce its oil production, and that it is preparing its own retaliation measures.
The level of the cap is to be reviewed by the EU and the G7 every two months, with the first review planned for mid-January 2023.
Japan, a member of the G7, also implemented the US$60/barrel oil price cap but excluded from the measure the crude oil imported from the Sakhalin-2 oil and gas project, citing energy security concerns. In September 2022, several Japanese companies decided to sign or renew long-term contracts with Sakhalin Energy, despite the Russian takeover of the project.
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