Six EU countries have urged to lower the price cap on Russian oil.

Six European Union countries have urged the European Commission to lower the price cap on Russian oil, set by the G7 nations at $60 per barrel, claiming it would decrease Moscow's revenues.

Source. This is reported by Reuters.

“Oil is the most significant source of revenue for Russia. We believe now is the time to enhance the effectiveness of our sanctions by reducing the G7 price cap on oil,” states a letter sent to the EU's executive body by the governments of Denmark, Latvia, Lithuania, Finland, Sweden, and Estonia.

Notably, the letter was signed by Sweden's Foreign Minister, Maria Malmer Stenergard.

“The lower the prices on Russian oil, the sooner peace will come,” she declared at a defense conference.

As calculated by the minister, a $10 per barrel price reduction would mean a loss of $200 billion per year for Russia, which accounts for 15% of the Russian military budget.

According to Reuters, the level of $60 has remained unchanged since the end of 2022, while in 2023-2024, market prices have generally been below this level. In their appeal to the European Commission, the countries add that the international oil market is currently better supplied than in 2022. This reduces the risk that a lower price cap would cause a market shock.

In October 2022, the EU and G7 countries agreed that Russian oil should not be sold for more than $60 per barrel.

At the same time, Sweden's Foreign Minister promised that her country would intensify efforts to combat the Russian “shadow fleet.” This refers to tankers transporting Russian oil that sail under foreign flags. Russia uses these to circumvent the oil embargo imposed two years ago due to the war in Ukraine.

The “shadow fleet” consists of old and often uninsured tankers that export crude oil and petroleum products from Russia in violation of international sanctions.

Russia is among the top three largest oil producers in the world. As noted by Reuters, after the price cap was implemented by Western countries at the end of 2022, Russia redirected its oil sales to China and India. In these markets, it is sold at significant discounts.