Russian President Vladimir Putin on Tuesday approved a decree prohibiting the delivery of oil and petroleum products to countries that impose a price cap in their contracts.
The ban on oil supply will come into effect from February 1, 2023, and remain so for the next five months. The ban on petroleum products will be defined later by the Cabinet of Ministers.
The development comes after G7 nations – Canada, France, Germany, Italy, Japan, Australia, the United Kingdom and the United States along with the European Union – had agreed to a $60-per-barrel price cap on Russian seaborne crude oil effective from December 5 in protest of Moscow’s invasion of Ukraine, reported Reuters.
As the second-largest oil exporter after Saudi Arabia, the oil business is an important source of revenue for Russia. By disrupting its sale, the G7 nations want to indirectly reduce the financial support to Moscow for its war on Ukraine.
“The EU agreement on an oil price cap, coordinated with G7 and others, will reduce Russia’s revenues significantly,” European Commission President Ursula von der Leyen had said. “It will help us stabilise global energy prices, benefitting emerging economies around the world.”
On Tuesday, Kremlin said that the decree was signed in response to the “unfriendly actions” taken by the United States, other foreign states and international organisations to establish a price cap on Russian oil and oil products, which violated international law.
In September, Putin had warned the west that Russia will cut off energy supplies to Europe if price caps were imposed on the country’s oil and gas exports.
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