Jakarta, CNBC Indonesia – On Tuesday (27/12/2022) President Vladimir Putin provided Russia’s long-awaited response to the oil price cap set by Western countries.
Reported by ReutersPutin signed a decree banning the supply of crude oil and petroleum products from February 1 for 5 months to countries that comply with the restrictions.
The G7 group, the European Union and Australia this month agreed on a price cap of $60 a barrel for Russian seaborne crude starting December 5 in connection with Moscow’s “special military operation” in Ukraine.
The ceiling is close to current Russian oil prices, but far below what Russia can sell for most of the year. Meanwhile, high oil prices have helped offset the impact of financial sanctions against Moscow.
Russia is the world’s second largest oil exporter after Saudi Arabia and a major disruption in its sales will have far-reaching consequences for global energy supplies.
The decision, published on government portals and on the Kremlin website, is presented as a direct response to “hostile acts and contrary to international law by the United States and by foreign countries and international organizations affiliated to them”.
“The delivery of Russian oil and petroleum products to foreign entities and natural persons is prohibited, provided that the use of maximum price fixing mechanisms is directly or indirectly considered in the contracts for such supplies,” the decision reads, specifically referring to the United States and other foreign countries, which has imposed price limits.
“The envisaged prohibition applies to all stages of the supply up to the final purchaser”.
The decree, which includes a clause allowing Putin to lift the ban in special cases, says: “It enters into force on February 1, 2023 and is valid until July 1, 2023.”
Crude oil exports will be banned from February 1, but the date to ban petroleum products will be determined by the Russian government and could be after February 1.
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