Putin extends Russian oil ban tied to G7, EU price cap through 2027

Russian President Vladimir Putin extended June 26 the ban on supplying Russian oil and petroleum products subject to the price cap introduced by the G7 and the EU until the end of 2027.

The ban, originally introduced by Russia in February 2023, was previously in effect until June 30, 2026.

The decree prohibits the supply of Russian oil and petroleum products to foreign legal entities and individuals, provided that the contracts for such supplies directly or indirectly stipulate the use of a price cap mechanism.

Under the current EU law, the price cap on Russian oil is set at 15% below the market rate for Russia's Urals crude, which is reviewed every six months. The next update to the cap is scheduled for July, but the EU proposed a temporary freeze on the cap, which sits at $44.10/b, on June 9.

"This will give oil markets time to stabilize while preserving pressure on Russia's revenue," EC President Ursula von der Leyen said.

The G7 group countries -- the US, the UK, Canada, France, Germany, Italy and Japan -- initially committed to ban Russian oil imports in 2022-23 and to cap the price of oil which goes to other countries as a response to Russia's full-scale invasion of Ukraine started in 2022. But while G7 leaders coordinated their actions on the cap and sanctions initially, now the countries have a very different approach to the matter.

Japan received at least two deliveries of Russian crude in the past two months from the Sakhalin-2 oil and gas project, where Japan's Mitsui & Co. and Mitsubishi Corp hold minority stakes. Japan also shipped Russian oil in 2023 and 2025.

While the UK banned imports of oil products made from Russian crude processed in third countries on May 20, it exempted the two largest import categories, diesel and jet fuel, until 2027.

The EU ban on imports of all oil products made from Russian crude entered into force on Jan. 21, 2026.

Despite the caps and restrictions, Russia continues to supply a significant amount of crude, with its main buyers including India, China, and Turkey.

Platts, part of S&P Global Energy, assessed Urals crude on a FOB Primorsk basis at $44.3/barrel on June 26, well down from $109.7/b on April 2, the highest price since June 2014.

Commission Vice President Kaja Kallas said on June 9 that energy sales "keep Russia's war machine running."