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Putin bans oil exports to nations that agreed to a Western price cap – New York Times – 28.12.22

President Vladimir V. Putin of Russia said on Tuesday that his government would ban Russian oil exports to any countries that agreed to the Western price cap put in place this month.

The announcement came in the form of a decree, signed by Mr. Putin and released by the Kremlin, saying that, starting on Feb. 1 and lasting for five months, no Russian oil would be sent to countries that honor the price cap.

“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 says, according to news agencies’ translations.

The impact of the move was like to be limited. The European Union, the region that is most dependent on Russian oil, has already banned most Russian oil imports, so the cap mainly affects buyers outside Europe.

After months of negotiations, the Group of 7 wealthy democratic nations — Britain, Canada, France, Germany, Italy, Japan and the United States — and the European Union agreed at the beginning of December to cap the price of Russian crude oil at $60 per barrel.

The move was aimed at weakening the Kremlin’s revenues and diminishing its financing for the war in Ukraine, without completely disrupting global supply at a time of soaring inflation.

However, the cap is set close to Russia’s existing selling price, and some countries — like Poland, Ukraine’s neighbor — argued that it did not make much of a difference to the Kremlin. The cap is to be reviewed every two months.

The Kremlin’s defiant response to the cap on Tuesday was somewhat anticipated, since Moscow had already insisted that it would not sell oil subject to a price limit.

A Russian deputy prime minister, Alexander Novak, said this month that Russia was “working on mechanisms” to undermine enforcement of the cap, without elaborating.

“We will sell oil and oil products only to countries that will work with us on market conditions, even if we would have to lower production,” Mr. Novak said on Rossiya-24, a Russian state news network.

Carly Olson

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Putin bans oil exports to nations that agreed to a Western price cap – New York Times – 28
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An oil tanker moored at an oil production complex in Novorossiysk, Russia, in October. Credit...Associated Press

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