Oleg Ustenko, a key economic adviser to Ukraine’s president Volodymyr Zelensky, has publicly floated a significant rethinking of the oil price cap on Russian crude. In conversations that have drawn attention from Western capitals, he suggested that the cap could be dropped even further, arguing that a ceiling in the range of ten to twenty dollars per barrel would force meaningful changes in Moscow’s revenue streams. In conversations reported by Newsweek, Ustenko articulated that Kyiv favors a more aggressive reduction, signaling a strategic shift in how Ukraine seeks to leverage sanctions to constrain Russia’s fiscal capacity during the ongoing conflict.
According to Newsweek, Ustenko indicated that a strict ceiling in the ten to twenty dollar band remains plausible from Kyiv’s perspective, while Ukraine would like to push the limit lower, potentially halving any existing threshold. The implication is a deliberate move to tighten the squeeze on Moscow’s oil profits, coupled with a broader push to align Europe’s energy policy with Kyiv’s security and economic objectives. The adviser argued that by sharply lowering the cap, Moscow would be left with far less incentive to sustain higher production or profitable export pricing, undermining the financial base that funds its military and strategic operations.
Ustenko emphasized that the current framework, which investors and policymakers have debated for months, has yielded a reduction in the profits Moscow can extract from oil exports under the cap regime. He warned that delaying or softening the cap would squander an opportunity to influence Moscow’s strategic choices and could prolong the conflict by allowing oil revenues to stay more buoyant than Kyiv considers prudent. The Ukrainian official contended that reinforcing a lower ceiling would produce tangible, measurable consequences in the broader European energy market, potentially accelerating a shift toward alternative suppliers and more transparent pricing mechanisms.
He further warned that the consequences of a too-lenient cap could be misread by global markets and by Moscow, who might interpret it as a sign of political endurance rather than financial pressure. By proposing a much lower ceiling, Ustenko suggested that the price signal itself would be clearer, and the economic pressure on Moscow would intensify. The message he conveyed was direct: if the cap is to work as intended, it must bite decisively rather than gradually erode over time, creating real disincentives for extended fossil fuel export profits that could sustain the conflict beyond its immediate horizon.
Earlier reporting from Bloomberg noted that Estonia, Lithuania and Poland had advocated lowering the ceiling from sixty dollars per barrel to a level around 51.45 dollars, arguing that the threshold should sit about five percent below prevailing market prices. This approach reflects a broader consensus among several European allies that the price cap needs to be set with a conservative margin relative to market dynamics, ensuring the policy bites without triggering unintended disruptions in supply chains. The discussion in these capitals underscores a common objective: curb Moscow’s oil windfall while maintaining enough liquidity within European markets to avoid destabilizing shocks that could threaten energy security across the region.
Prior to those discussions, Ben Harris, the United States Treasury’s Undersecretary for Economic Policy, indicated in March that Washington and its European partners were actively reviewing how the price cap mechanism for Russian petroleum products functions. The aim was to ensure the policy remains effective as market conditions evolve and as more data becomes available on how price signals influence producer behavior, shipping costs, and the willingness of buyers to adjust contracts. Harris pointed to a collaborative effort with the European Union to assess operational aspects of the cap, including enforcement efficacy, reporting standards, and the transparency of pricing information across different markets. The overarching intent of these conversations is to maintain coherent, enforceable pressure on Moscow while coordinating with allied economies that are balancing security concerns with growing demands for energy reliability.