The G7 price cap is an international economic scheme or mechanism designed to limit the price of Russian seaborne crude oil and petroleum products. The concept was agreed upon by G7 finance ministers on September 2, 2022, following the Russian invasion of Ukraine. Its primary objectives are to reduce Russia's revenues to finance its war while simultaneously maintaining a reliable supply of Russian oil to the global market to stabilize energy prices.
The scheme is implemented by the Price Cap Coalition, which includes the G7 countries, the European Union, and Australia. It works by prohibiting entities in these countries from providing key services—such as maritime transport, financing, and insurance—for Russian seaborne oil sold above the cap. The initial cap for crude oil was set at US$60 per barrel on December 3, 2022, and took effect on December 5, 2022. A key provision requires a maritime Attestation from service providers, warranting that the oil was purchased below the set price. The cap for refined petroleum products, which came into effect on February 5, 2023, was set at $100 per barrel for high-value products and $45 per barrel for low-value products. The mechanism is connected to broader sanctions against Russia and is implemented through domestic laws, such as EU Regulation 833/2014. The cap is subject to review, with the goal of keeping it at least 5% below the average market price for Russian oil, based on data from the International Energy Agency (IEA). Recently, EU Regulation 833/2014 was amended in February 2024 to disrupt circumvention by reducing opportunities to disguise oil purchased above the cap using opaque shipping costs.