The number of high-voltage parallel cables is rapidly increasing. The alternating magnetic field generated by the working current of power cable cores induces voltage in the adjacent metal sheath; if the sheath and earth form a circuit, the metal sheath will create a circulating current, resulting in a reduction in the load capacity of power cable and the life of cable insulation. This paper uses MATLAB to construct a model for calculating the circulating current of cables connected in parallel in the same phase, and the effects of cable arrangement, phase sequence, and loop distance of cables connected in parallel on the sheath circulating current are investigated. The induced voltage in power cable sheaths is decomposed into two components, i.e., the component resulting from the core current and the component resulting from the metal sheath. Two new sheath connection methods are proposed to suppress the sheath circulating current. Compared with traditional cross-connection grounding, the proposed methods can reduce the coupling degree between loops, thus decreasing the induced voltage and circulating current. The different grounding methods of the sheath are modeled in the environment of an electromagnetic transient program (EMTP), and the sheath circulating current is simulated and compared with the conventional cross-connection grounding method. In the asymmetric arrangement, the proposed series connection method can reduce the sheath circulating current by at least 50%; however, its increases the sheath circulating current in the symmetric arrangement.