Russia’s oil revenues are falling due to price caps imposed by Western countries on Russian crude supplies, and Europe is well-positioned to handle any price pressure, a US Treasury official said on Wednesday, according to Reuters.

The G7 countries, Australia and the European Union will extend sanctions against Russia over the war in Ukraine by imposing price caps on its petroleum products, such as gasoline and diesel, on February 5.

At the end of last year, the coalition set a limit on the sale of Russian crude oil at sea at $60 per barrel.

Russia is losing a large amount of money every day because of the restrictions, a senior Treasury official said on a conference call with reporters.

“Every dollar that Russia does not receive in oil revenue is one less dollar that it can use to support its economy or invest in the weapons it needs to wage this illegal war in Ukraine,” the official said.

The official did not begin to estimate Russia’s losses from oil supplies. But the cap has increased the cost of shipping some Russian oil cargoes because it forces countries that want Russian oil to exceed the limit to use a phantom fleet of non-Western ships and risk using “less reliable” insurance, the official said.

U.S. officials say the cap will “institutionalize” lower Russian oil prices that major oil consumers, including India and China, are seeking.

The U.S. Treasury Department is looking at the gap between Russian oil estimates and international Brent crude prices to get a partial picture of how that has affected Russia’s revenues.

Russian Urals oil for delivery to Europe it traded around $53.43 on Wednesday, maintaining a strong discount to benchmark Brent crude, which was trading at $82.67.

Russian Deputy Prime Minister Oleksandr Novak said on Wednesday that the country’s oil producers have no problem securing export deals despite Western sanctions and price caps.

But Novak admitted that the main problems for Russian oil were a significant discount to international standards and rising transport costs.