Alberta bets on its oil wealth as leverage in trade talks with Trump<\/a>.<\/p>\nThe mechanism provides for an automatic semi-annual review, calibrated to keep the cap 15% below the average market price for Urals crude. With Brent trading at around $93 per barrel on Monday, the mechanical application of the formula would push the cap well above current levels at the next review. Analysts have raised their 2026 average price forecasts by 40%, to around $90 per barrel, since February. The European Commission is therefore examining a voluntary freeze at $44.10 to decouple the mechanism from overheated international prices.<\/p>\n
Russian Revenues at Their Highest Level in Two and a Half Years<\/p>\n
Up to 30% of seaborne Russian crude is still traded under the cap, while the remainder moves via a shadow fleet operating outside Western oversight mechanisms. The closure of the Strait of Hormuz \u2014 which accounted for one-fifth of global oil and gas flows before the war broke out on February 28 \u2014 gave Moscow additional budgetary relief through higher prices. Despite a 7% decline in physical export volumes, the higher valuation of oil sold outside the cap has more than offset the volume drop.<\/p>\n
Revenues from Russian fossil fuels peaked in spring 2026 at 734 million euros per day \u2014 their highest level in two and a half years \u2014 according to data compiled by the KSE Institute (Kyiv School of Economics). For April 2026 alone, Russian state tax receipts on crude extraction reportedly reached 7.8 billion euros, calculated on the basis of a Urals market price indexed to the international price surge. These figures illustrate the budgetary headroom available to the Kremlin, which maintaining the cap at $44.10 is designed to erode.<\/p>\n
A $60 Absolute Ceiling and the Stalled Maritime Services Ban<\/p>\n
The Commission may also propose introducing an absolute ceiling of $60 per barrel for all future reviews, regardless of prevailing average prices, diplomatic sources said. This measure would represent a compromise against the stalled idea of a full ban on Western maritime services for Russian oil \u2014 an option that would have ended the capping mechanism altogether. EU member states adopted the legal basis for the ban in the last sanctions package, conditioning any decision on its phase-in on prior G7 coordination.<\/p>\n
That coordination remains complex: the United States, unlike the rest of the G7 and its allies, did not sign on last year to the moving price cap formula. The 21st sanctions package, of which the cap freeze proposal could form a part, is expected to be finalized ahead of the July review against a backdrop of persistently elevated international prices.<\/p>\n","protected":false},"excerpt":{"rendered":"A Capping Mechanism Under Pressure from Surging Prices Established in late 2022, the G7 price cap aimed to…\n","protected":false},"author":2,"featured_media":18582,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5],"tags":[18,2637,12059],"class_list":["post-18581","post","type-post","status-publish","format-standard","has-post-thumbnail","category-brussels","tag-brussels","tag-oil","tag-russian-oil-price-cap-freeze"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@be\/116680222491456856","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/be\/wp-json\/wp\/v2\/posts\/18581","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/be\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/be\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/be\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/be\/wp-json\/wp\/v2\/comments?post=18581"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/be\/wp-json\/wp\/v2\/posts\/18581\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/be\/wp-json\/wp\/v2\/media\/18582"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/be\/wp-json\/wp\/v2\/media?parent=18581"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/be\/wp-json\/wp\/v2\/categories?post=18581"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/be\/wp-json\/wp\/v2\/tags?post=18581"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}