By John Q. Hosedrinker 
Shopping Trends team members are not affiliated with the journalists at CTV News. The team operates independently and may earn a commission through the use of provided shopping links. Further information about the team’s structure and purpose is available for interested readers. This commission structure does not influence the content presented.
Read the original article here
Canada will lower the price cap for Russian oil, and that’s a move that’s designed to put the squeeze on Russia’s ability to fund its war efforts. Think of it as a financial elbow to the gut, making it harder for them to profit from their oil exports. The core idea is simple: if Russia wants to sell its oil, it has to do so at a price below a certain limit. Canada, along with the EU and the UK, has decided to drop that price cap to $47.60 per barrel, a significant reduction from the previous $60. This is all about limiting Russia’s access to the funds it needs to sustain its military actions against Ukraine.
Now, why is this important? Because it directly impacts Russia’s bottom line. If they can only sell their oil at a lower price, they make less money. Less money means they have less to spend on their war machine. Essentially, the price cap forces Russia to sell its oil for much less than it might otherwise get, squeezing their profits and potentially hindering their ability to continue the conflict. Canada doesn’t even buy Russian oil itself, but it’s sending a clear signal that it’s not going to tolerate anyone else profiting handsomely from it either. Canada wants to make sure that Russian oil is not being used to fund the war in Ukraine, and that is what the price cap is meant to do.
This move is also a coordinated effort with other G7 nations. The United States is on board, making it a united front against Russia. It’s a way of collectively ratcheting up the economic pressure. This all goes back to the fact that Canada is taking a stand with others against Russia’s actions in Ukraine. Canada has been steadfast in its support of Ukraine, and this is another way of showing that commitment. Canada’s message is clear: Russia’s actions won’t be tolerated, and they’ll continue to support Ukraine’s territorial integrity, sovereignty, and peace.
The impact of this price cap is more significant than it might initially seem. Major insurance providers, especially those based in the UK, handle the vast majority of the world’s tanker insurance. These insurers will refuse to work with Russian oil tankers unless the oil is sold below the cap. This effectively forces Russia to sell at a lower price to remain insured. The goal is to limit their ability to sell their oil at a profit. This reduces the revenue they can generate from oil exports.
You might be wondering, how exactly does this work in practice? Well, it boils down to this: Canada, along with others, is essentially saying, “You can’t buy Russian oil for more than a certain price.” If a country does, then it could face sanctions or other consequences. The details of how the price is verified and enforced can be complex, but the principle remains: limit the price, limit the revenue, and limit Russia’s ability to wage war. This is a strategic move, designed to make it increasingly difficult for Russia to profit from its oil sales and, ultimately, to impact its ability to fund the conflict.
One point that is worth remembering is that Canada banned direct Russian oil imports way back in March of 2022. What is really going on here is about sending a message and also about closing any loopholes. This move is designed to keep the pressure on Russia. There are no real loopholes here, because Canada has no current purchases from Russia, which is not the case for some other nations.
This move, of course, is not without its complexities. Russia has already taken steps to circumvent these caps, including banning its own companies from adhering to them. It’s a game of cat and mouse, but the goal remains the same: to limit Russia’s ability to access the funds they need to continue their war in Ukraine. Canada’s actions, are a signal of commitment and a clear indication that Canada is doing what it can to support Ukraine and the collective efforts against Russia’s aggression. It is important that the rest of the world see the coordinated actions as a message to Russia and a show of support for Ukraine.