G7+ oil price cap continues to pile pressure on Putin six months on

The oil price cap is significantly impacting Russia’s ability to use oil to finance its illegal war.
45% plunge in Russian Finance Ministry energy revenues.
UK continues to monitor effectiveness of the cap alongside its Coalition partners amid expected market price fluctuations.

UK-backed price cap on Russian oil and oil products is successfully undermining Putin’s ability to fund his illegal war in Ukraine, according to official data collated six months on from implementation.

Russian government income declined by over 20% between January and March 2023 compared to a year ago. The Russian Ministry of Finance posted a 45% plunge in government energy revenues in the same period.

According to the International Energy Agency’s Oil Market Report for July 2023, Russian oil export revenues were down by $1.5 billion month-on-month in June to $11.8 billion (down $9.9 billion year-on-year).

Independent research by the Centre for Research on Energy and Clean Air has estimated that the price cap on crude oil is costing Russia around €160 million per day.

Treasury Lords Minister Baroness Penn said: “The oil price cap is succeeding in its dual objectives – bearing down on Putin’s most lucrative source of revenues that could otherwise be used to fund his illegal war, while ensuring that vulnerable countries can continue to secure affordable oil.

“The oil price cap forms a critical part of the largest and most severe package of sanctions ever imposed on a major economy. We will continue to keep the pressure on Russia alongside our international partners.”

The G7 and Australia (G7+), who collectively constitute the Price Cap Coalition, agreed to cap the price of Russian seaborne oil and refined oil products in September 2022 as a way to undermine Putin’s ability to fund his illegal war in Ukraine through inflated global oil prices, while ensuring that third countries can continue to secure affordable oil. T

he crude oil price cap and high- and low-value refined oil price caps (collectively referred to as the G7+ oil price cap) were introduced on 5th December 2022 and 5th February 2023 respectively.

UK guidance has been periodically updated to assist market participants with implementation of, and compliance with, the cap, and OFSI will continue to engage collaboratively with industry partners to ensure as much clarity is provided as possible.

Recent routine fluctuations in oil prices have seen the average price of Urals rise above the G7+ cap level. For any above-cap trades, Russia will face significant headwinds in securing alternative service providers, with data from market intelligence provider Argus indicating that the cost to Russia of moving its product is considerable. This added burden on Russia will continue to contribute to depressed revenues.

The Price Cap Coalition continues to monitor the effectiveness of the price cap and is prepared to review and adjust the measure as appropriate to ensure that it continues to meet its twin goals.

UK and coalition partners announce price caps on Russian oil products

The United Kingdom and international coalition partners have announced price caps on Russian oil products

The Price Cap Coalition of the G7, the European Union and Australia have set caps on the price of seaborne Russian oil products, effective from 05 February 2023.
High-value Russian exports such as diesel and gasoline, will be capped at $100 while lower-value products such as fuel oil will be capped at $45.
Chancellor Jeremy Hunt hails the efforts of the UK and its allies in throttling the revenues fuelling Vladimir Putin’s illegal war in Ukraine.

The UK and its coalition partners will only provide services facilitating the maritime transport of refined oil products originating in Russia if the goods are traded at or beneath the cap levels of $100 for high-value products like diesel and $45 for low-value products like fuel oil. These prices will be kept under review.

This follows the $60 price cap on Russian crude oil that came into force on 5 December last year. Initial signs suggest that the crude oil cap is successfully curtailing Putin’s ability to use revenues from oil sales to finance his illegal war while minimising disruption to global supply. Russia’s flagship crude oil is now selling around $40 lower than global benchmarks.

The UK government has already introduced an import ban on Russian oil products; therefore, the caps will not be used by the UK.

Chancellor of the Exchequer, Jeremy Hunt, said: “Undermining Putin’s war machine through further sanctions on its funding streams will ensure the Russian government faces the full consequences of its unjustifiable actions.

“The UK has already banned the import of Russian oil products, and we stand shoulder to shoulder with our allies in continuing to pile the pressure on Putin’s revenues while standing in solidarity with the Ukrainian people.”

G7 finance ministers agreed to capping the price of Russian seaborne oil and refined oil products in September 2022 as a way of undermining Putin’s ability to fund his illegal war in Ukraine through inflated global oil prices, while ensuring that third countries can continue to secure affordable oil.

The UK has been front footed in its engagement with international allies and has worked closely with industry and US partners to lead design of the caps. This collaboration has been key given the major role of UK services in facilitating maritime trade. For example, the UK is a global leader in the provision of protection and indemnity (P&I) insurance cover which relates to third-part liability claims – 60% of the global cover provided by the International Group of the P&I clubs is written in the UK.

Given the number of varied oil products on the market, two caps have been introduced to cover two categories of refined oil products. ‘Premium-to-crude’ products are those of high export value often used for transport and electricity generation, such as kerosene-based jet fuel and diesel, while ‘discount-to-crude’ pertains to products of a lesser value like naphtha. The two-cap approach has been introduced as this is the simplest to implement and most workable for industry.

UK imposes sweeping new sanctions to starve Putin’s war machine

full asset freeze on largest Russian bank and end to all new UK outward investment into Russia announced
UK to end all imports of Russian coal and oil by end of 2022 and take action against oligarchs and key strategic industries
Foreign Secretary will urge G7 colleagues to maintain the momentum on further waves of sanctions at meeting today

Following further reports of abhorrent attacks on civilians in Ukraine this week, the Foreign Secretary has announced a significant ratcheting up of UK sanctions on Russia.

As a leading voice calling for international action, the UK’s fifth package of measures will cut off key sectors of the Russian economy and end our dependency on Russian energy. Yesterday’s measures have been delivered in lockstep with our global allies as the EU has also banned imports of Russian coal and the US has sanctioned SberBank.

Announcing the package yesterday, the Foreign Secretary Liz Truss said: “Today, we are stepping up our campaign to bring Putin’s appalling war to an end with some of our toughest sanctions yet.

“Our latest wave of measures will bring an end to the UK’s imports of Russian energy and sanction yet more individuals and businesses, decimating Putin’s war machine.

“Together with our allies, we are showing the Russian elite that they cannot wash their hands of the atrocities committed on Putin’s orders. We will not rest until Ukraine prevails.”

Key sanctions announced today include:

asset freezes against Sberbank and Credit Bank of Moscow. Sberbank is Russia’s largest bank and this freeze is being taken in co-ordination with the US
an outright ban on all new outward investment to Russia. In 2020 UK investment in Russia was worth over £11 billion. This will be another major hit to the Russian economy and further limit their future capabilities
by the end of 2022, the UK will end all dependency on Russian coal and oil, and end imports of gas as soon as possible thereafter. From next week, the export of key oil refining equipment and catalysts will also be banned, degrading Russia’s ability to produce and export oil – targeting not only the industry’s finances but its capabilities as a whole
action against key Russian strategic industries and state owned enterprises. This includes a ban on imports of iron and steel products, a key source of revenue. Russia’s military ambitions are also being thwarted by new restrictions on its ability to acquire the UK’s world-renowned quantum and advanced material technologies
and targeting a further eight oligarchs active in these industries, which Putin uses to prop up his war economy

They include:

Viatcheslav (Moshe) Kantor, the largest shareholder of fertilizer company Acron with vital strategic significance for the Russian government
Andrey Guryev – known close associate of Vladimir Putin and founder of PhosAgro – a vital strategic company that produces fertilizers
Sergey Kogogin, director of Kamaz – manufacturer of trucks and buses, including for the Russian military
Sergey Sergeyevich Ivanov, President of the world’s largest diamond producer Alrosa, which the UK also sanctioned
Leonid Mikhelson, the founder, and CEO of leading Russian natural gas producer Novatek, with a net worth of £18billion
Andrey Akimov, the CEO of Russia’s third largest bank Gazprombank
Aleksander Dyukov, the CEO of Russia’s third largest and majority state-owned oil producer GazpromNeft
Boris Borisovich Rotenberg, son of the co-owner of Russia’s largest gas pipeline producer SGM. The Rotenberg family are known for their close connections to Putin and a number of them have already been sanctioned

At today’s meeting of G7 Foreign Ministers the Foreign Secretary will call for further collective action, including an accelerated timetable for all G7 countries to end their dependency on Russian energy.

She will also call for continued G7 unity in imposing further co-ordinated waves of sanctions against the Russian economy and elites around Putin, until Russia withdraws its troops and ends its brutal campaign of aggression against Ukraine once and for all.

View the full UK Sanctions List.

Truss: We will not rest until Putin fails and Ukraine prevails

Foreign Secretary Liz Truss gave a speech at the British Embassy in Poland about stepping up our efforts to stop Putin’s appalling war in Ukraine

Welcome to the British Embassy in Warsaw. It’s good to have the opportunity to hear from my friend and colleague Dmytro Kuleba, the Ukrainian Foreign Minister at what is an extremely difficult time.

What we have seen on the streets of Irpin and Bucha are scenes that we will never forget. We have seen butchery, evidence of rape and sexual violence as well as the indiscriminate killing of civilians.

We will ensure that the perpetrators are brought to justice for these barbaric crimes. And together with our allies we will step up our efforts to stop Putin’s appalling war.

Three weeks ago, the UK led 41 states to refer these atrocities to the International Criminal court. We are providing additional funding to the ICC.

The UK military and police are providing technical assistance to the investigations. And the Metropolitan Police War Crimes unit have commenced the collection of evidence. We are working very closely with the Ukrainian government on this.

We have appointed former ICC judge Sir Howard Morrison as an independent adviser to the Ukrainian prosecutor general.

And today, I can announce that we are launching a £10 million civil society fund to support organisations in Ukraine, including those helping the victims of conflict-related sexual violence.

We will not rest until these criminals have been brought to justice.

We are clear that after these appalling crimes Russia has no place on the Human Rights Council.

And it is the responsibility of the UK and our allies – and that is what Dymtro and I discussed today – to step up our support for our brave Ukrainian friends. That means more weapons and more sanctions. Putin must lose in Ukraine.

Later this week, the G7 Foreign Ministers and the NATO Foreign Ministers will meet. We need to announce a tough new wave of sanctions.

The reality is that money is still flowing from the West into Putin’s war machine, and that has to stop.

In Brussels, I’ll be working with our partners to go further as has been advocated by Dmytro in banning Russian ships from our ports, in cracking down on Russian banks, in going after new industries filling Putin’s war chest like gold, and agreeing a clear timetable to eliminate our imports of Russian oil, gas and coal.

We also need even more weapons of the type the Ukrainians are asking for.

The UK is supplying more including next-generation light anti-tank weapons, Javelin Missiles and Starstreak anti-aircraft systems. And last week, we hosted a donor conference with our allies to secure more.

The fact is that being tough is the only approach that will work. Putin has escalated this war.

And this approach is vital to ensuring he loses in Ukraine, and that we see a full withdrawal of Russian troops and Ukraine’s hand is strengthened at the negotiating table.

There should be no talk of removing sanctions whilst Putin’s troops are in Ukraine and the threat of Russian aggression looms over Europe.

We need to see Putin withdraw his troops. We need to see Ukraine’s full territorial integrity restored. We need to see Russia’s ability for further aggression stopped. We need a plan to rebuild Ukraine. And we need to see justice done at the International Criminal Court.

Dmytro – we salute your bravery and the bravery of the Ukrainian people.

We are determined to help in whatever way we can. We will back you unwaveringly in your negotiations.

And together, we will not rest until Putin fails and Ukraine prevails.

Scotland: Strengthening sanctions on Russia

Public bodies in Scotland are being given advice on how to handle contract bids from companies linked to Russia.

To help strengthen economic sanctions imposed on Russia following the illegal invasion of Ukraine, guidance has been published on how to reject bids to procure a contract for goods or services from firms which are established in Russia and Belarus. This also applies to companies with substantial business operations in Russia, as well as those under the control of a person with links to the Russian regime.

Business Minister Ivan McKee said: “The Scottish Government has been clear since the beginning of the illegal invasion of Ukraine, that the business community has a moral responsibility to take economic action by reviewing operations for links and connections to Russia – and severing them where it is possible to do so.

“While it is up to the contracting authority as decision-maker to make an informed, rounded, case-specific assessment, this guidance will ensure public bodies can exclude companies from new contracts, or terminate existing ones, if the bidder has connections to the Russian regime.”

Read the guidance in full here.

Ukraine invasion: World powers unite to hammer Russian economy

Joint statement by the UK and other international partners on financial measures against Russia:

We, the leaders of the United Kingdom, the European Commission, France, Germany, Italy, Canada, and the United States condemn Putin’s war of choice and attacks on the sovereign nation and people of Ukraine.

We stand with the Ukrainian government and the Ukrainian people in their heroic efforts to resist Russia’s invasion. Russia’s war represents an assault on fundamental international rules and norms that have prevailed since the Second World War, which we are committed to defending. We will hold Russia to account and collectively ensure that this war is a strategic failure for Putin.

This past week, alongside our diplomatic efforts and collective work to defend our own borders and to assist the Ukrainian government and people in their fight, we, as well as our other allies and partners around the world, imposed severe measures on key Russian institutions and banks, and on the architects of this war, including Russian President Vladimir Putin.

As Russian forces unleash their assault on Kyiv and other Ukrainian cities, we are resolved to continue imposing costs on Russia that will further isolate Russia from the international financial system and our economies. We will implement these measures within the coming days.

Specifically, we commit to undertake the following measures:

First, we commit to ensuring that selected Russian banks are removed from the SWIFT messaging system. This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally.

Second, we commit to imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions.

Third, we commit to acting against the people and entities who facilitate the war in Ukraine and the harmful activities of the Russian government. Specifically, we commit to taking measures to limit the sale of citizenship—so called golden passports—that let wealthy Russians connected to the Russian government become citizens of our countries and gain access to our financial systems.

Fourth, we commit to launching this coming week a transatlantic task force that will ensure the effective implementation of our financial sanctions by identifying and freezing the assets of sanctioned individuals and companies that exist within our jurisdictions.

As a part of this effort we are committed to employing sanctions and other financial and enforcement measures on additional Russian officials and elites close to the Russian government, as well as their families, and their enablers to identify and freeze the assets they hold in our jurisdictions.

We will also engage other governments and work to detect and disrupt the movement of ill-gotten gains, and to deny these individuals the ability to hide their assets in jurisdictions across the world.

Finally, we will step up or coordination against disinformation and other forms of hybrid warfare.

We stand with the Ukrainian people in this dark hour. Even beyond the measures we are announcing today, we are prepared to take further measures to hold Russia to account for its attack on Ukraine.

UK forces arrive to reinforce NATO’s eastern flank

Royal Navy ships, British Army troops, and Royal Air force fighters are arriving on new deployments in eastern Europe to bolster NATO’s eastern front.

HMS Trent is in the eastern Mediterranean, conducting NATO exercises with Merlin Helicopters and RAF P8 Poseidon Maritime Patrol Aircraft. They will be shortly joined by HMS Diamond, a Type 45 destroyer, which set sail from Portsmouth on Friday.

Challenger 2 tanks and armoured vehicles of the Royal Welsh battlegroup have arrived in Estonia from Germany, with further equipment and around 1000 troops arriving over the coming days. This will lead to a doubling of the UK presence in Estonia, where the UK leads a NATO battlegroup as part of the Alliance’s enhanced Forward Presence.

RAF Typhoon fighter jets have already completed their first air policing missions across the region, with an additional four aircraft based at RAF Akrotiri in Cyprus. Typhoons flying from bases in Cyprus and the UK are now patrolling NATO airspace over Romania and Poland alongside NATO allies with Voyager air-to-air refuelling aircraft in support.

Defence Secretary Ben Wallace MP said: “Our armed forces are once again being called upon in the service of our Nation and I salute the bravery and sense of duty shared by all our personnel who have been deployed to support NATO.

“Alongside our NATO Allies, these deployments constitute a credible deterrent to stop Russian aggression threatening the territorial sovereignty of member states.”

Yesterday, the Defence Secretary held a virtual donor conference with more than 25 countries, including the US and Canada and some countries outside NATO, coordinating their support to Ukraine.

They will continue to give humanitarian and military support, which includes ammunition and anti-tank weapons, and the UK has offered to conduct logistics operations to support the delivery of donations.

NATO Allies are united in response to Russia’s unprovoked invasion of Ukraine and are collectively taking a range of measures to protect their security and deter further aggression.

At a meeting of NATO Heads of State and government on Friday, all 30 member nations agreed that:

“We will make all deployments necessary to ensure strong and credible deterrence and defence across the Alliance, now and in the future. Our measures are and remain preventive, proportionate and non-escalatory.”

UK hits Russia with targeted sanctions

Oligarchs at the heart of Putin’s inner circle and banks which have bankrolled the Russian occupation of Crimea have been targeted by the first wave of UK sanctions in response to Russia’s further violation of Ukraine’s sovereignty.

Following the Prime Minister’s announcement to the House of Commons, Foreign Secretary Liz Truss yesterday designated the initial tranche of sanctions on Russia. The sanctions package targets oligarchs and banks associated with the Kremlin.

Foreign Secretary Liz Truss said: “This first wave of sanctions will hit oligarchs and banks close to the Kremlin. It sends a clear message that the UK will use our economic heft to inflict pain on Russia and degrade their strategic interests.

“And we are prepared to go much further if Russia does not pull back from the brink. We will curtail the ability of the Russian state and Russian companies to raise funds in our markets, prohibit a range of high tech exports, and further isolate Russian banks from the global economy.

“These will be surgically targeted sanctions that will hit Russia hard.”

Using new powers introduced on 10 February, the UK has frozen the assets and imposed travel bans on 3 leading members of the Russian elite of particular significance to the Kremlin: Gennady Timchenko, Russia’s sixth richest oligarch, and Boris and Igor Rotenberg, 2 long-standing associates of the regime.

Assets of 5 Russian banks involved in bankrolling the Russian occupation have also been frozen with immediate effect. This includes Bank Rossiya, which is particularly close to the Kremlin, Black Sea Bank for Development and Reconstruction, IS Bank and Genbank. The assets of Promsvyazbank, the pivotal bank in propping up Russia’s defence sector, have also been frozen.

The UK will also sanction those members of the Russian Duma and Federation Council who voted to recognise the independence of Donetsk and Luhansk in flagrant violation of Ukraine’s territorial sovereignty.

In addition, over the coming weeks we will extend the territorial sanctions imposed on Crimea to non-government controlled territory in the so-called breakaway republics of Donetsk and Luhansk. No UK individual or business will be able to deal with this territory until it is returned to Ukrainian control.

In the event of further aggressive acts by Russia against Ukraine, we have prepared an unprecedented package of further sanctions ready to go. These include a wide ranging set of measures targeting the Russian financial sector, and trade.

As part of this, should Russia not de-escalate the UK will shortly introduce legislation which will, amongst other steps, prevent Russia from issuing sovereign debt on UK markets. Working with partners we will effectively be isolating Russia from the global economy, and making it far more difficult for oligarchs and businesses to operate outside their own borders.

Find out more:

First Minister: ‘Deep concern’ over actions of Russia in Ukraine

Statement from the First Minister

Commenting on the situation in Ukraine, First Minister Nicola Sturgeon said: “I am deeply concerned by the actions of Russia and the disturbing reports of its invasion of Ukraine.

“The Scottish Government unreservedly condemns Russia’s actions, which are in flagrant violation of international law and which further destabilise an already volatile situation.

“The Scottish Government calls for an immediate cessation of such aggressive activities, with an assurance of the protection of all civilians within Ukraine.

“We offer our unqualified support for Ukrainian independence, sovereignty and territorial integrity and to the people of Ukraine.

“We stand with members of the International Community in opposing Russian aggression, in demanding the most severe sanctions on Russia and in seeking to deter a further and wider invasion of Ukraine.”

Demonstrators set to ‘besiege’ Edinburgh Jobcentre

‘We are fighting back’ – Ethel MacDonald, ECAP

Demonstrators will descend on High Riggs Jobcentre today to declare their resistance to benefits sanctions and workfare.

The protest at the Jobcentre near Tollcross will continue over lunchtime and organisers Edinburgh Coalition Against Poverty say: ‘We aim to send a strong message that cutting people’s benefits and forcing them to rely on foodbanks is not acceptable. Sanctions and workfare not only attack the claimants directly affected, they undermine all workers’ wages and conditions.’

Ethel MacDonald of ECAP said: “An increasing number of benefit claimants are being sanctioned under the DWP’s increasingly repressive measures and more than ever the Job Centre is aggressively pushing the Workfare programmes.

“Just consider the barbaric numbers: according to Corporate Watch, 139,000 sanctions were handed out to Jobseeker’s Allowance claimants in 2009 but this more than tripled to 508,000 in 2011, the coalition’s first full year in government. And the Child Poverty Action Group state that since 2010 sanctions have increased by 126%.”

Sanctions can be from a period of four weeks to up to 3 years.

ECAP support claimants to contest sanctions and resist being sent on workfare. Ethel MacDonald explained: “Claimants are not prepared to remain passive victims – we are fighting back. With the support of ECAP, Edinburgh Jobseeker Jimmy recently overturned a four week sanction imposed after the Oxgangs Neighbourhood Centre refused to take him on a Community Work Programme workfare placement. Workfare provider Learndirect falsely alleged to the DWP that Jimmy had been ‘very intimidating’ to the placement manager – in fact he had just politely informed him that it was disgraceful that a community resource was participating in such exploiting schemes.

“ECAP and Jimmy met the Scotland area manager of Learndirect, insisted that Learndirect withdraw the sanction referral, and also wrote to the DWP explaining that it was Jimmy’s democratic right to express his views on workfare to the placement boss. The DWP have now overturned the sanction and are repaying Jimmy his benefits.”

542 voluntary organisations have declared they will not take part in workfare and signed the Keep Volunteering Voluntary agreement.

The decreasing number of organisations still participating in the schemes are under pressure to pull out of programmes which lead to benefit cuts and sanctions. ECAP regularly blockade and occupy workfare users such as the Salvation Army and DEBRA, and workfare providers like Learndirect. And this week Brian Tannerhill denounced that the organisation he founded, McSence, were using workfare and called on the communities of Mayfield and Easthouses to tell the directors of the Midlothian social enterprise this was unacceptable.

The Edinburgh action is supported by Edinburgh Anti Cuts Alliance, Greater Leith Against the Cuts, Edinburgh Industrial Workers of the World and Edinburgh Anarchist Federation, and is part of a Britain-wide Week of Action in the run-up to the General Election. Co-ordinated via Boycott Workfare, demonstrations are taking place Britain-wide.