There will be no downsides to a price cap issued on Russian oil imports but the move could restrict its ability to fund its invasion of Ukraine, the treasurer says.
Jim Chalmers said the price cap would help ease global oil prices, and urged other countries to join the push by the G7 nations.
The wealthy G7 countries - the United States, Japan, Germany, Britain, France, Italy and Canada - agreed to set a price cap on Russian oil imports in early September.
It is expected the price cap will fall between $US40 to $US60 a barrel.
It will come into effect on December 5.
"When we think about the dangerous global economic situation right now ... oil prices at the global level are a big part of those concerns," Dr Chalmers told reporters on Tuesday.
The government said the move would "not completely deal with this challenge" but should work to ease pressures on global oil prices.
"Our view is anything that has the potential to deal with our concerns around the global oil price we should explore," the treasurer said.
"We need to be realistic. No one is under any illusions about the uncertainty around the Russian response."
The G7 partners expect the cap to work by banning insurance and financial services to ships carrying Russian oil above the price ceiling.
US Treasury Secretary Janet Yellen says the price cap will cut the revenue Russia receives for its oil without reducing global supply.
The Kremlin has since said it would stop selling oil to countries that imposed price caps, and warned the move could destabilise the oil market further.
Russian oil revenue fell $US1.2 billion in August, but the Kremlin still raked in $US17.7b, according to the International Energy Agency.
Revenue is largely being propped up by sales to China and India.
US Treasury assistant secretary Ben Harris said even if the two nations didn't join the cap, a negotiated 30 to 40 per cent discount on Russian oil would be considered "a win".
Australia's support for the price cap follows the nation's complete ban on importing, purchasing and transporting Russian oil, gas, refined petroleum products and coal.
Foreign Minister Penny Wong reiterated Australia's support for Ukraine.
"Australia condemns Russia's unilateral, illegal and immoral aggression against the people of Ukraine," Senator Wong said
"Australia strongly supports Ukraine's sovereignty and territorial integrity, and we call on Russia to immediately withdraw its forces from Ukrainian territory."