Tags: russian oil and gas price cap | export ban

Putin Bans Russian Oil Exports to Countries With Price Cap

Putin Bans Russian Oil Exports to Countries With Price Cap
Russia President Vladimir Putin at an informal summit of the heads of state of the Commonwealth of Independent States in St. Petersburg, Russia, at the Presidential Library named after Boris Yeltsin, Dec. 26, 2022 (Getty Images)

Tuesday, 27 December 2022 11:34 AM EST

President Vladimir Putin on Tuesday delivered Russia's long-awaited response to a Western price cap, signing a decree that bans the supply of crude oil and oil products from Feb. 1 for five months to nations that impose the cap.

The Group of Seven major powers, the European Union and Australia agreed this month to a $60-per-barrel price cap on Russian seaborne crude oil effective from Dec. 5 over Moscow's "special military operation" in Ukraine.

The decree, published on a government portal and the Kremlin website, was presented as a direct response to "actions that are unfriendly and contradictory to international law by the United States and foreign states and international organizations joining them."

"Deliveries of Russian oil and oil products to foreign entities and individuals are banned, on the condition that in the contracts for these supplies, the use of a maximum price fixing mechanism is directly or indirectly envisaged," the decree stated, referring specifically to the United States and other foreign states that have imposed the price cap.

The decree, which includes a clause that allows for Putin to overrule the ban in special cases, stated: "This...comes into force on Feb. 1, 2023, and applies until July 1, 2023."

Crude oil exports will be banned from Feb. 1, but the date for the oil products ban will be determined by the Russian government and could be after Feb. 1.

The price cap, unseen even in the times of the Cold War between the West and the Soviet Union, is aimed at crippling Russian state coffers and Moscow's military efforts in Ukraine.

Finance Minister Anton Siluanov said on Tuesday that Russia's budget deficit could be wider than the planned 2% of GDP in 2023, with the oil price cap squeezing export income, an extra fiscal hurdle for Moscow as it spends heavily on its military campaign in Ukraine.

However, some analysts have said that the cap will have little immediate impact on the oil revenues that Moscow is currently earning.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
President Vladimir Putin on Tuesday delivered Russia's long-awaited response to a Western price cap, signing a decree that bans the supply of crude oil and oil products from Feb. 1 for five months to nations that impose the cap.
russian oil and gas price cap, export ban
330
2022-34-27
Tuesday, 27 December 2022 11:34 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
 
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
© Newsmax Media, Inc.
All Rights Reserved