Russian Oil Price Cap Rules Tightened

The United States and other countries participating in the Price Cap Coalition announced new rules aimed at making it harder to Russia to circumvent the price cap imposed on Russian oil in response to its invasion of Ukraine.

“These changes will further complicate efforts by Russian exporters to circumvent the price cap while deceiving Coalition service providers, and further raise costs for any Russian exporters that need premier services but are unwilling to sell oil under the cap,” according to the coalition's announcement December 21..

The changes include requiring that relevant Coalition service providers receive attestations from their counterparties each time they lift or load Russian oil.

The coalition also is introducing changes that will require supply chain participants with access to itemized ancillary costs (e.g., insurance and freight) to share these upon request with entities further down the supply chain.

Coalition members will provide guidance to their service providers and relevant industry, as well as details on the transition period, in the coming weeks through their respective domestic processes. These changes will support the implementation of the oil price cap and disrupt circumvention by reducing opportunities for bad actors to use opaque shipping costs to disguise oil purchased above the cap.

The Coalition noted that Russian tax revenue from oil and petroleum product exports – Russia’s key source of revenue – was 32 percent lower between January-November 2023 compared to the same period last year.

In addition to the United States, Coalition members include the G7, the European Union and Australia.