Ukraine war

Russia bans oil sales to nations, corporations complying with price cap

Russian President Vladimir Putin and Belarusian President Alexander Lukashenko during their meeting. (Photo: Alexey Danichev/Sputnik)

Western nations have imposed a price cap on oil imports in response to Moscow's invasion of Ukraine. In response, Russian President Vladimir Putin has issued a directive prohibiting oil shipments to countries and firms who adhere to the price cap.

Tuesday marked the long-awaited arrival of Moscow's reaction to the pricing ceiling. It prohibits supplying crude oil and oil products to nations that adhere to the cap beginning on February 1 for five months.

The presidential decree stated that the sales prohibition may be repealed in specific instances by Putin's "special judgment."

The top industrialized nations of the Group of Seven (G7), the European Union, and Australia reached an agreement to cap the price of Russian seaborne crude oil at $60 per barrel, effective December 5.

The cap implemented concurrently with an EU embargo on seaborne exports of Russian crude oil is intended to prevent Russia from circumventing the embargo by selling its oil to other parties at inflated rates.

It also attempts to limit Russia's income while ensuring that Moscow continues to supply the global market.

Russia has expressed optimism that it will find new clients and stated that the cap would not affect its military campaign in Ukraine.

An oil and gas specialist, Vyacheslav Mishchenko, told Al Jazeera that the country's presidential mandate appeared to have at least one immediate consequence.

"Crude oil prices are already increasing on the market," he remarked. I believe that this is a direct result of the decree.

Russia is the second-largest oil exporter in the world, behind Saudi Arabia, and severe disruption to its sales would have far-reaching effects on the global energy supply.

Publish : 2022-12-28 11:11:00

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