G7 Divided on Russian Oil Price Cap as Trump Hesitates: EU, UK Ready to Act Alone

European nations push to slash Russian oil price cap to $45 at G7 summit, despite uncertainty over Trump’s support; pressure mounts to curb Moscow’s war funding.

Most G7 countries are prepared to reduce the Russian oil price cap even if U.S. President Donald Trump withholds support, signaling a growing rift ahead of the G7 summit in Canada. Sources familiar with the matter confirmed that the European Union, the United Kingdom, and Canada are ready to act independently if Washington hesitates, with plans to push the cap down from $60 to $45 per barrel.

The cap, first introduced in late 2022, aimed to limit Russia’s ability to finance its war in Ukraine by restricting access to Western maritime insurance for oil sold above $60. But with global crude prices now lower and Urals oil trading well below the cap, the current level is seen as ineffective.

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EU and UK Lead the Push to Lower Cap

European officials have been lobbying for weeks to cut the price ceiling, arguing that the $60 cap is now toothless. EU sources say a new proposal within its 18th sanctions package would slash the cap to $45 a barrel. However, the proposal must receive unanimous approval from all EU member states—a process that could take weeks.

Despite the procedural hurdles, European leaders remain committed. “There is a push among European countries to reduce the oil price cap to $45 from $60,” one source confirmed. “There are positive signals from Canada, Britain, and possibly the Japanese. We will use the G7 to try to get the U.S. on board.”

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Trump Administration Yet to Take a Firm Position

It remains unclear where President Trump stands on lowering the price cap. A White House official told reporters that Trump “looks forward to a robust discussion on key economic and geopolitical issues” at the summit but did not comment directly on the oil cap proposal.

Last month, during the G7 finance ministers’ meeting in the Canadian Rockies, U.S. Treasury Secretary Scott Bessent expressed skepticism about changing the cap. However, some prominent U.S. lawmakers, including Senator Lindsey Graham, support lowering the threshold. Graham is also promoting a broader sanctions bill that includes high tariffs on Russian oil buyers.

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Power of the Insurance and Shipping Markets

Although the U.S. plays a key role in global dollar-denominated oil transactions, sources say European efforts could still succeed without full American backing. The UK dominates maritime insurance markets, while the EU has significant sway over the Western shipping fleet.

The Western alliance has been cracking down on Russia’s “shadow fleet”—a group of tankers and intermediaries helping Moscow circumvent the cap. These enforcement efforts are beginning to impact Russian revenues. Rosneft, Russia’s state-owned oil firm, reported a 14.4% drop in profits last year, reflecting the tightening squeeze.

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Japanese Support Remains a Wild Card

Japan’s stance remains unclear. While Tokyo has not explicitly endorsed lowering the cap, it may align with its G7 peers if consensus builds at the June 15–17 summit in Canada. If Japan joins Canada, the UK, and EU members, the coalition could effectively reshape the enforcement mechanism even without U.S. participation.

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Market Context: Oil Prices and Russia’s Outlook

Currently, Russia’s Urals crude trades at about $10 below Brent, which has hovered below $70 per barrel since April. That spread has weakened the effectiveness of the original $60 cap and given new urgency to calls for reform.

With Moscow’s oil profits under strain and Western governments facing domestic political pressure to do more to isolate Russia economically, the timing of a coordinated cap revision may be crucial.

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Conclusion: G7 Unity in Question

As the G7 leaders prepare to convene in Canada, the future of the Russian oil price cap stands as a critical test of transatlantic unity. With Trump’s position uncertain, the EU, UK, and Canada may lead a recalibration of economic pressure on Moscow—either with or without U.S. buy-in.