On 18 July 2025, the UK Government announced a lowering of the Oil Price Cap (“OPC”) to further inhibit Russia’s ability to use oil revenues to finance its illegal invasion of Ukraine.
The OPC was first introduced in December 2022 to reduce Russia’s oil revenues in response to the invasion of Ukraine that same year. The OPC prevents G7 companies from shipping, insuring or servicing any Russian crude oil sold above the OPC price of USD 60 per barrel, with separate thresholds applying to Russian petroleum products.
UK OPC changes
The key takeaways from the UK’s changes to the OPC are as follows:
- From 23:01 BST on 02 September 2025, the OPC for crude oil will decrease from the current price of USD 60 per barrel to USD 47.60 per barrel. This implementation date is intended to provide G7 companies with time to adjust to the new OPC.
- Any trade of Russian crude oil with an effective contract date before 02 September 2025 which complies with the existing USD 60 per barrel cap will benefit from a 45 day ‘wind-down period’, which expires at 23:01 BST on 17 October 2025.
- The change to the OPC for crude oil will not apply to either high-value refined oil products, which includes diesel and petrol, or to low-value refined oil products such as fuel oil. These remain unchanged with price caps of USD 100 and USD 45 per barrel respectively.
- The UK has also updated its Oil Price Cap Guidance and FAQs guidance to reflect these changes to the OPC.
These changes by the UK broadly align with similar changes made by the EU in its 18th sanctions package, which we previously discussed in our blog (accessible here). The EU also reduced the OPC from USD 60 per barrel to USD 47.60 per barrel applicable from 03 September 2025, subject to review after 6 months and accompanied by an automatic dynamic adjustment mechanism.
