The UK, in partnership with the G7 countries, Australia and the
European Union, have today agreed to set the price cap on Russian
crude oil traded by firms shipping oil to third countries at $60.
This price will be kept under review. The UK and its coalition
partners will only provide services facilitating the maritime
transport of Russian oil if firms trade at or beneath this cap.
G7 finance ministers agreed to a cap in September as a way of
undermining Putin’s ability to fund war in Ukraine through
inflated global oil prices, while ensuring that third countries
can continue to secure affordable oil.
A General Licence will be published shortly that will provide an
Oil Price Cap exception for third countries, so that firms
supplying oil to them are able to continue accessing services
from Coalition countries after the 5th December,
but only if trading Russian oil at or below the cap.
Insurance is one of the key services that
enables the movement of oil by sea, particularly
protection and indemnity (P&I) insurance which
relates to third-party liability claims – the UK is a
global leader in the provision of P&I cover, writing 60%
of the global cover written by the International Group of the
P&I clubs.
Measures on services that facilitate the maritime transportation
of refined oil products will come into force on the
5th February, to align with EU timelines for a
parallel measure.
Chancellor said:
“The UK will stand with Ukraine and her people for as long as
Putin’s war continues. We will not waver in our support and we
will continue to look for new ways to clamp down on Putin’s
funding streams wherever we can.”
United States Secretary of the Treasury Janet Yellen
said:
“Together, the G7, European Union, and Australia have now jointly
set a cap on the price of seaborne Russian oil that will help us
achieve our goal of restricting Putin’s primary source of revenue
for his illegal war in Ukraine while simultaneously preserving
the stability of global energy supplies. Today’s announcement is
the culmination of months of effort by our coalition, and I
commend the hard work of our partners in achieving this outcome.”
To enforce the scheme the Treasury has set up a new team, based
in the Office of Financial Sanctions Implementation. This team
will set up the licensing and enforcement system for the Oil
Price Cap; engage with industry to ensure readiness for the cap;
and monitor the level and impact of the cap on an ongoing
basis.
Notes to editors
- The legislation laid on 3 November is a statutory instrument
made under the Sanctions and anti-Money Laundering Act 2018,
amending the Russian (Sanctions) (EU Exit) Regulations 2019.
- A General Licence will be issued on 4 December which will
provide the oil price cap exception to this legislation and
enable UK services to continue facilitating the transport of
Russian-origin crude oil from the 5th December
and refined oil products from the 5th February,
from a place in Russia to a third country as well as between
third countries when purchased at or below the oil price cap
level.
- General guidance on the operation of the UK ban and cap
was published on the
14th November and will be updated on 4
December – this is being followed up with a programme of
industry engagement events and opportunities.
