Japan and New Zealand join international coalition lowering Russian oil price cap
Japan and New Zealand announced they are reducing the price cap on Russian crude oil from $60 to $47.60 per barrel, joining a growing international coalition to further restrict Moscow’s energy revenues.
Japan’s Ministry of Foreign Affairs said the lower price cap takes effect immediately and will apply to imports of Russian crude oil as well as related services and capital transactions, with transitional provisions for existing contracts through 17 October.
The Japanese measures also include asset freezes on 47 Russian entities and nine individuals, plus five individuals and one entity from occupied Ukrainian territories, along with export prohibitions targeting 11 entities in third countries other than Russia or Belarus.
In New Zealand, Foreign Minister Winston Peters said that lowering the price cap ‘is a calculated step to curtail crucial oil revenues fuelling Putin’s illegal war of aggression against Ukraine’.
He announced New Zealand’s 32nd sanctions round, targeting 19 vessels and as many individuals and entities, including Russia’s military intelligence Unit 29155 for cyberattacks against Ukrainian government networks using malware.
New Zealand’s latest sanctions also target actors involved in chemical weapons and disinformation campaigns, shadow fleet vessels used to evade sanctions, alternative payment providers, and facilitators in North Korea and Iran.
The moves came just days after Norway’s decision to reduce its cap to the same level. Norwegian Foreign Minister Espen Barth Eide noted that ‘oil exports still account for a third of the Russian government’s revenue’ and that ‘reducing revenue and increasing pressure on the Russian economy makes it more difficult for the Russian authorities to conduct their illegal warfare in Ukraine’.
The coordinated actions follow the European Union’s decision in July to lower its price cap to $47.60 and implement a dynamic pricing mechanism that automatically adjusts the cap based on market conditions. Canada, Norway and the United Kingdom subsequently aligned with the EU’s approach as part of G7 efforts to limit Russian revenues while maintaining global oil supply.
The price cap mechanism allows Western companies to provide shipping, insurance, and financial services for Russian oil exports only when sold below the designated threshold, effectively limiting Moscow’s ability to charge premium prices.
The coordinated price cap reductions reflect growing international pressure to tighten economic restrictions on Russia nearly three years into its invasion of Ukraine, with allies seeking to maximise impact while avoiding disruptions to global energy markets.
https://www.beehive.govt.nz/release/new-zealand-strengthens-russian-oil-price-cap
