US unlikely to back lower Russian oil price cap, but options remain: experts

The Trump administration appears unlikely to support the EU's proposal to lower the G7-led price cap on Russian oil to $45/b, though the US and other countries still have options to pressure Moscow, experts say.

For instance, the EU could still go it alone with a lower price cap and ban refined products to crack down on Moscow's revenues; and the US could still ramp up sanctions on Russian oil majors.

The EU proposed lowering the price cap in an effort to limit revenues as Russia continues to wage war with Ukraine. The proposal comes as Russian crude exports rallied to a seven-month high in May, according to S&P Global Commodities at Sea. The data shows that 81% of the cargos flowed on non-G7 tankers, highlighting the difficulty of enforcing the price cap.

Proponents say a lower cap is needed because global oil prices have declined, reducing the effectiveness of the current $60/b cap.

Spot FOB Primorsk Urals crude has averaged $55.58/b so far in June, down from $66.93/b in January, Platts assessment data shows. Platts is a unit of S&P Global Commodity Insights.

State Department stance

When asked about the price cap proposal, the US State Department did not directly speak to the issue.

"Our sanctions remain in place, and we have nothing new to announce," a State Department spokesperson said on background.

But US President Donald Trump is keeping his options open while he pursues diplomacy. "The president has been clear that we have a range of measures available if he determines that Putin is not interested in negotiating," the State Department spokesperson said.

The lack of new sanctions on Russia so far in the Trump administration is an important sign of its stance, Rachel Ziemba, a senior adviser at Horizon Engage, said.

Plus, the players in Trump's orbit dislike the price cap on a few grounds, Ziemba said.

"It gives discounts to China and India and others, and it has facilitated the creation of the shadow fleet," she said. "I don't think there is support for a lower price cap."

Seaborne exports of Russian-origin crude climbed 4% from April to 3.665 million b/d in May, CAS said in its latest Russian Crude Market Briefing. India received an average of 1.703 million b/d and China received an average of 1.113 million b/d, according to CAS data.

While the White House has thus far resisted the idea of reducing the price cap, the situation could change, Fernando Ferreira, director of geopolitical risk at Rapidan Energy Group said.

"Growing frustration with Putin across all corners of the administration could lead to serious consideration of lowering the cap – especially if they conclude that lowering the cap would have a limited impact on overall crude prices," Ferreira said.

G7 leaders are expected to discuss the price cap proposal at the annual G7 summit, which will be held June 15-17 in Canada.

European leaders at the G7 will have a chance to convince Trump that the proposal can be a part of his own plan to end the war, Daniel Fried, a former US ambassador to Poland, said in an analysis on the Atlantic Council website.

Pressure options

If the US does not sign on to the price cap proposal, the EU could still pursue it on its own.

Such a move by Europe could be partly effective if the cap is accompanied by fines on European companies that violate the price cap, bans on the transfer of old vessels and other efforts to increase enforcement, Ziemba said.

The growth of the shadow fleet is being driven by sales from shipowners in Greece and other EU countries, according to a recent report by the Brookings Institution. Between February 2022 and March 2025, Europe supplied 41% of the tankers added to the fleet, the report said.

But Clayton Seigle, a senior fellow at the Center for Strategic and International Studies, argued that an EU price cap would not be effective without US involvement.

"Enforcement and deterrence are key to success, and without the United States, those essential ingredients would be lacking," he said.

The EU could crack down, with no US participation needed, by banning the import of refined products made with Russian feedstocks, Seigle said.

"That would back out a lot of barrels from India, for example, and leave Russian barrels used to manufacture them homeless," he said.

The EU proposed this type of refined product ban on June 10, alongside the proposal to lower the price cap.

In the US, the price cap debate could be superseded by sanctions legislation under consideration in Congress, which could potentially strand at least some Russian barrels, Seigle said.

But a better option would be for the US to put primary blocking sanctions on Rosneft and Lukoil, and secondary sanctions on companies that trade with them, Seigle said.

"Those are the most powerful and realistic cards we can play: trade-ending secondary tariffs are too self-defeating and as such would likely be interpreted as bluff," he said.