Ottawa expands price cap on Russian petroleum products to cut revenue

The VF Tanker 9 oil tanker ship sailing under the 15th of July Martyrs Bridge in the Bosphorus, Istanbul, Turkey, December 15th, 2022, left the port of Temryuk, Russia on December 12th. (The Canadian Press/AP-Emrah Gurel)

The federal Treasury said Canada would join other G-7 countries and Australia in expanding Russia’s oil cap to include the country’s offshore oil products.

The maximum price for Russian oil shipped by sea will be $100 a barrel for “premium-to-crude” products and $45 for “discount-to-crude” products as of Sunday, the ministry said.

The press release added that the new cap builds on Russia’s oil price cap announced in December, and both moves would weaken President Vladimir Putin’s ability to finance a war with Ukraine. .

The Treasury Department says the cap will be enforced by barring service from G7 or Australian companies to buyers who do not adhere to the price cap.

It said the price cap mechanism was designed to reduce Russia’s income while recognizing the importance of stable energy markets and minimizing the negative impact on the economy.

Finance Minister Chrystia Freeland said Russia’s oil revenues had already declined since the first price cap came into effect and the additional price cap “would deal another blow to Putin’s military coffers”. rice field.