Ukraine says it’s time to review price cap on Russian oil

(Reuters) – Ukraine’s foreign minister said on Thursday it was time to review the $60 per barrel price cap imposed on Russian seaborne oil, on the grounds that the current market price for Russia’s Urals oil blend was below that level.

The Group of Seven countries, Australia and the European Union will extend sanctions on Russia for its war in Ukraine by putting a price cap on its oil products, such as gasoline and diesel, on Feb. 5. The coalition placed a $60 per barrel limit on sea-borne Russian crude oil sales late last year.

Russian Urals grade crude for delivery to Europe was quoted at about $57.26 on Thursday, maintaining a recent steep discount to benchmark Brent crude, which was trading at $86.41. The price though has been as low as around $50 per barrel this month.

Foreign Minister Dmytro Kuleba said in a tweet: “Ukraine is confident it’s time to review the oil price cap given the current market price on Urals is lower than $50 USD per barrel.

“This decision should ensure a drastic reduction in Russia’s income to finance the war, mass atrocities, and destabilization in Europe and elsewhere.”

Russian Deputy Prime Minister Alexander Novak said last week that oil producers had not had difficulties in securing export deals despite the Western sanctions and price cap.

(Reporting by David Ljunggren; Editing by Frances Kerry)