Canada will lower price cap for Russian oil

Finance Minister Francois-Phillippe Champagne along with the Foreign Affairs Minister Anita Anand are seen in this image.

The federal government has announced it will lower the price cap for Russian-origin crude oil to US$47.60 per barrel, down nearly $13 from the previous $60 per barrel, in an effort to restrict Russia’s war efforts against Ukraine.

Finance Minister Francois-Phillippe Champagne along with the Foreign Affairs Minister Anita Anand announced the measure in a press release on Friday, saying Canada, alongside with the EU and the U.K. have taken a stand against Russia’s “unjust and unprovoked war” against Ukraine.

“The lower price cap will weaken Russia’s ability to fund its illegal war and exert renewed pressure on Putin’s military apparatus,” the Department of Finance’s statement said.

“By further lowering the price cap on Russian crude oil, Canada and its partners are ratcheting up the economic pressure and limiting a crucial source of funding for Russia’s illegal war,” Champagne said in the statement. “Our government has been a steadfast ally to Ukraine, and we will continue to support them in defending their territorial integrity, sovereignty, and peace for its people.”

According to the statement, this strategy will also safeguard any future price caps that may be implemented by Canada.

“Canada has stood, and will continue to stand, with Ukraine and its brave people as they defend their sovereignty against Russia’s illegal invasion,” Anand’s statement read. “Beyond the many direct supports Canada has provided in Ukraine’s defence, we also continue to apply pressure on Russia as well as deny its means to fund the ongoing war.”

The coalition includes all the G7 countries, along with Australia and New Zealand, who are aiming to restrict Russia’s ability to fund the war by capping the price of Russian oil, according to the statement.

The price cap on seaborne Russian-origin crude oil was first implemented on Dec. 2, 2022, after Russia invaded Ukraine.

Meanwhile, U.S. President Donald Trump has announced that he will be meeting Russian President Vladimir Putin to discuss the war in Ukraine shortly, after imposing additional sanctions on Russia and tariffs on countries that purchase Russian oil.

The changes in the price aim to exert extra pressure on Putin’s military efforts and will come into play during the coming weeks.

Canada’s ban on direct Russian oil imports from March 2022 remains in effect.

With files from the Associated Press