Canada Joins Allies to Lower Price Cap on Russian Oil
Canada has announced it will cut the price cap on seaborne Russian-origin crude oil from US $60 to US $47.60 per barrel, joining forces with the European Union and the United Kingdom. The move is aimed at further reducing Moscow’s oil revenues, which are seen as a key funding source for its ongoing war in Ukraine. According to the Department of Finance, this step will align Canada’s sanctions with those of its closest allies and send a united message of economic pressure. The government says new regulations will be rolled out in the coming weeks to enforce the lower cap. By making it harder for Russia to sell oil above this limit, officials hope to weaken its war chest without disrupting global supply. The decision reflects Ottawa’s continued commitment to standing with Ukraine and its allies in pushing back against Russian aggression.
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Lower Oil Cap Targets Moscow’s Revenue and War Funding
The price cap system, first introduced in 2022, restricts Western companies from providing key services like shipping, insurance, and financing for Russian oil sold above the allowed price. Lowering the cap means Russia will either have to sell oil at a cheaper rate or turn to alternative, often costlier, trade networks. Experts say this could put more strain on Moscow’s economy, although enforcement will be crucial to prevent loopholes such as using “shadow fleet” tankers or non-Western insurers. Canada’s decision strengthens the collective effort by major economies to limit Russia’s earnings while keeping energy markets stable. The European Union and the UK made similar moves in July, and Canada’s alignment boosts the impact of these measures. With global attention on the war in Ukraine, this coordinated action sends a strong political and economic message that allies are ready to tighten pressure when needed.
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