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Ottawa expands price caps to Russian petroleum products to reduce revenues

Russian oil revenues have already declined since the first price cap took effect
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VF Tanker 9 oil tanker ship, which departed from Russian Temryuk port on December 12, sails under the 15 July Martyrs Bridge at the Bosphorus strait in Istanbul, Turkey, Thursday, Dec. 15, 2022. The federal Finance Department says Canada is joining forces with its fellow G-7 countries plus Australia to expand caps on Russian oil to include seaborn petroleum products from that country. THE CANADIAN PRESS/AP-Emrah Gurel

The federal Finance Department says Canada is joining its fellow G-7 countries plus Australia to expand caps on Russian oil to include seaborne petroleum products from that country.

The department says the maximum price for seaborne Russian-origin petroleum will be US $100 per barrel for “premium-to-crude” products as of Sunday, and US $45 for “discount-to-crude” products.

It says in a news release the new caps build on a Russian crude oil price limit announced in December, adding both moves will weaken President Vladimir Putin’s ability to fund the war against Ukraine.

The Department of Finance says the caps will be enforced by prohibiting buyers who do not abide by the price caps from obtaining services from companies in the G7 or Australia.

It says the price cap mechanism has been designed to reduce Russian revenues while recognizing the importance of stable energy markets and minimizing negative economic effects.

Finance Minister Chrystia Freeland says Russian oil revenues have already declined since the first price cap took effect and the additional price caps “will be another blow to Putin’s war chest.”

The Canadian Press

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