Oil price cap
A regime set up by the G7 and the EU in 2022 that lets Western firms ship and insure Russian oil only if it was sold at or below a set dollar ceiling.
How it works
The cap bans services, not sales. G7 finance ministers agreed on 2 September 2022 that freight, insurance, financing and brokering for seaborne Russian crude and products may be provided only if the cargo was bought at or below the cap. The EU enforces the rule through Article 3n of Council Regulation 833/2014. The crude cap started at 60 dollars a barrel on 5 December 2022, fell to 47.6 dollars on 3 September 2025 and to 44.1 dollars on 1 February 2026.
The EU's 18th sanctions package of July 2025 added an automatic adjustment: the cap is reset every 6 months at 15% below the average market price of Russian crude over 22 weeks. The Commission's first calculation, published on 15 January 2026, produced the 44.1-dollar level. On 23 July 2026 the Council froze the mechanism until July 2027 under Regulation 2026/1848, so that Russia would not profit from the closure of the Strait of Hormuz. The caps on products stay at 100 dollars for those trading at a premium to crude, such as diesel and petrol, and 45 dollars for those at a discount, such as fuel oil.
Compliance rests on the attestation. Tier 1 actors with direct sight of prices, such as traders and brokers, keep invoices and contracts. Tier 3A actors without that access, including shipowners, insurers and P&I clubs, collect a written undertaking from the customer that the cargo was not bought above the cap. Since 20 February 2024 attestations must be issued per voyage, and itemised ancillary costs such as freight and insurance must be shared within 30 days of a request. EU operators must keep the records for at least 5 years from the date of transport.
The weak link is that an attestation is a declaration. EU guidance says an operator that performed due diligence and relied in good faith on a falsified attestation is not in breach. A third-country vessel that carries a cargo bought above the cap loses access to EU services for Russian oil for 90 days after unloading. Enforcement therefore has 2 levers: the flag state that demands the paperwork and the insurer that refuses cover without it.
Why it matters here
The cap is the West's main tool for squeezing Russian oil revenue, and it is only as strong as its paper trail. A Malta-flagged tanker that loaded diesel at Primorsk for the US on 22 October 2026 is now testing it: Malta's sanctions unit said it had asked the owner and operator for documents showing the cargo complies with the 100-dollar product cap. While Washington strikes a diesel deal with Moscow, the burden of enforcement falls on EU-flagged ships and EU flag states. If the cargo is discharged without the paperwork, the cap becomes unenforceable even on a vessel tied to 2 EU member states.