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UK and EU lower the crude Oil Price Cap, striking at the heart of Putin’s oil revenues
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new measure will drive down the market value of Russian oil, disrupting the flow of oil money into Putin’s war chest
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coordinated action comes as the UK and allies continue to ratchet up economic pressure on Russia
UK will ramp up economic pressure on Russia with fresh measures directly targeting Putin’s critical oil revenues.
The UK and EU have today announced a lowering of the Crude Oil Price Cap, striking at the heart of Putin’s oil revenues.
Today’s action will lower the Crude Oil Price Cap from $60 barrel to $47.60 directly hitting Russia’s oil revenues, which have already fallen 35% year-on-year to May.
This will clamp down on Putin’s oil industry, driving down the market value of Russian crude oil and hurting a crucial source of funding for the Kremlin’s illegal war in Ukraine.
Every financial blow against Russia’s oil revenues is another step towards a just and sustainable peace in Ukraine, and a step towards security and prosperity in the UK and beyond, which is a key foundation of the government’s Plan for Change.
Speaking at the G20 in South Africa, Chancellor of the Exchequer Rachel Reeves said:
The UK and its EU allies are turning the screw on the Kremlin’s war chest by stemming the most valuable funding stream of its illegal war in Ukraine even further.
This decisive step to lower the Crude Oil Price Cap will target Russia’s oil revenues and ramp up the pressure on Putin by exploiting his biggest vulnerability – while keeping energy markets stable.
Foreign Secretary David Lammy said:
As Putin continues to stall on serious peace talks, we will not stand by.
That’s why we’re striking at the heart of the Russian energy sector alongside the EU. Together we will continue to apply relentless pressure on Putin, squeezing his critical oil industry and cutting off funding for his illegal war in Ukraine.
The UK is taking decisive action to cut off Putin’s oil supply pipeline and has to date sanctioned over 250 ships responsible for transporting Russian energy.
The UK has been clear that delaying peace efforts will only redouble our resolve to help Ukraine to defend itself and ratchet up pressure on Russia. That’s why the UK has committed £3 billion a year of military support for Ukraine for as long as it takes.
Today’s action comes as the UK further clamps down on Russian malign activity, exposing and sanctioning Russian spies responsible for spreading chaos and disorder on Putin’s orders.
The UK and EU are working in lockstep to combat those callously fuelling the fires of destruction in Ukraine and are committed to ramping up economic pressure on Putin, forcing him to the table to secure a just and lasting peace in Ukraine.
Background
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The Crude Oil Price Cap, introduced in December 2022, is a measure to limit the Kremlin’s ability to finance its war against Ukraine, and prohibits G7 companies from shipping, insuring, or otherwise servicing Russian oil sold above $60 per barrel. Now, the UK and EU are lowering this to $47.60 per barrel, directly slashing Putin’s oil profits.
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The price caps of $100 on high-value refined oil products, such as diesel and petrol, and $45 on low-value refined oil products, such as fuel oil, remain unaffected.
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Oil exports are one of Russia’s key vulnerabilities: energy revenues account for around 30% of total federal revenues which in turn fund Russia’s war machine.
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The government is giving UK businesses time to adapt to the lower price cap. The lowered Oil Price Cap of $47.60 per barrel comes into effect at 23:01 (BST), Tuesday, 2 September 2025. Additionally, for any trades with an effective date of contract before this date, and which are compliant with the existing price cap of $60 per barrel, there will be a wind-down period of 45 days, ending at 23:01 (BST), Friday, 17 October 2025.
