Status: 12/27/2022 6:22 p.m
At the beginning of December, the EU and G7 introduced a price cap for Russian oil. As of February, Russia will now ban oil exports to countries that apply a cap. President Putin signed a corresponding decree.
From February 1, Russia will ban the sale of oil to countries that have imposed an oil price cap in response to the war against Ukraine. According to a decree signed by President Vladimir Putin, deliveries of Russian oil and oil products to foreign companies and individuals are prohibited if the contracts “directly or indirectly contain a mechanism for fixing a price ceiling”.
The measure is therefore valid until July 1st. For oil products such as gasoline and diesel, the Russian government should set the exact start date, which cannot be earlier than February 1st. The ban can be lifted in individual cases that Putin decides on.
Price cap decided at the beginning of December
The price cap for Russian oil was decided by the EU at the beginning of December and is currently 60 US dollars (57 euros) per barrel (159 litres). The G7 countries, Australia and Norway have joined the measure. The upper limit applies to oil transport by sea. This is intended to limit Russian export earnings and thus also reduce the possibilities for financing the Russian war.
Moscow had made it clear before the decision that it rejected the price cap. The Russian leadership speaks of a violation of the free market and has been announcing countermeasures for weeks. The ban was therefore expected.
Also EU oil embargo in force
An EU oil embargo has also been in effect since the beginning of December: This means that crude oil from Russia can only be imported into the EU in exceptional cases. The import restriction is based on a sanctions regulation passed by the 27 member states in June because of the Russian war of aggression against Ukraine. It came into force shortly after the decision, but provided for transitional periods for the oil embargo.
The price cap was introduced in addition to the oil embargo. It is intended to prevent Russia from circumventing the sanctions and selling the raw material to other countries at the prevailing market price.