UK Tightens Oil Price Cap in Blow to Putin’s War Machine

The UK government is ramping up economic pressure on Russia with a decisive new measure directly targeting the Kremlin’s vital oil revenues. In a coordinated move with the European Union, the UK has today announced a reduction of the Crude Oil Price Cap from $60 per barrel to $47.60 per barrel.

This action strikes at the heart of Russia’s oil revenue stream, aiming to drive down the market value of Russian crude oil and further disrupt the flow of oil money into Putin’s war chest. With Russia’s oil revenues already down 35 percent year-on-year to May, this tightening of the price cap is designed to clamp down further on the Kremlin’s ability to fund its illegal war in Ukraine.

Oil exports remain one of Russia’s critical vulnerabilities, with energy revenues contributing around 30 percent of the country’s total federal income, much of which sustains Putin’s war machine.

Background to Oil Price Cap

The Crude Oil Price Cap was first introduced in December 2022 as part of the G7’s efforts to limit the Kremlin’s ability to finance its war in Ukraine. It prohibits G7 companies from shipping, insuring, or otherwise servicing Russian oil sold above the cap.

Every financial blow against Russia’s oil revenues takes the UK and its allies another step closer to peace in Ukraine, security in Europe, and prosperity at home, reflecting the government’s Plan for Change.

A coordinated & deliberate escalation

The new price cap measure, introduced alongside the EU, forms part of a broader effort by the UK and its allies to ratchet up economic pressure on Russia while ensuring global energy market stability. The price caps on refined oil products remain unchanged at $100 per barrel for high-value products such as diesel and petrol, and $45 for low-value products like fuel oil.

UK Chancellor of the Exchequer Rachel Reeves, speaking at the G20 in South Africa, said:

The UK and its EU allies are turning the screw on the Kremlin’s war chest by stemming the most valuable funding stream of its illegal war in Ukraine even further. This decisive step to lower the Crude Oil Price Cap will target Russia’s oil revenues and ramp up the pressure on Putin by exploiting his biggest vulnerability – while keeping energy markets stable.

Foreign Secretary David Lammy added:

As Putin continues to stall on serious peace talks, we will not stand by. That’s why we’re striking at the heart of the Russian energy sector alongside the EU. Together we will continue to apply relentless pressure on Putin, squeezing his critical oil industry and cutting off funding for his illegal war in Ukraine.

Strong record of action & continued resolve

The UK has taken a leading role in cutting off Putin’s oil supply pipeline, sanctioning more than 250 ships responsible for transporting Russian energy to date. This latest move complements the government’s broader campaign to expose and sanction malign Russian activity, including the targeting of Russian spies spreading chaos and disorder on Putin’s orders.

The UK has also committed 3 billion pounds a year in military support for Ukraine for as long as it takes, reinforcing its commitment to securing a just and lasting peace.

Implementation timeline & compliance

The government is giving UK businesses time to adjust to the lower price cap. The new Oil Price Cap of $47.60 per barrel will come into effect at 23:01 BST, Tuesday, 2 September 2025. A 45-day wind-down period will apply for trades agreed before that date and compliant with the existing $60 cap, ending at 23:01 BST, Friday, 17 October 2025.

Read the press release here.