West News Wire: In reaction to Moscow’s invasion of Ukraine, Russian President Vladimir Putin signed an executive order banning oil shipments to nations and businesses that adhere to a price cap set by Western nations.
On Tuesday, Moscow responded to the price cap in a much-anticipated manner. It forbids the supply of crude oil and oil products to countries that adhere to the cap beginning on February 1 for a period of five months.
According to the presidential order, Putin may decide to relax the sales prohibition in specific circumstances.
Australia, the European Union, and the Group of Seven major international powers agreed this month to a $60 per barrel price restriction on Russian seaborne crude oil, which will take effect on December 5.
The cap, which was introduced alongside an EU embargo on seaborne deliveries of Russian crude oil, aims to ensure Russia cannot bypass the embargo by selling its oil to third countries at high prices.
It also seeks to restrict Russia’s revenue while making sure Moscow keeps supplying the global market.
Russia has expressed confidence it would find new buyers and said the cap will not affect its military campaign in Ukraine.
Its presidential decree, however, appears to have had at least one immediate effect, an oil and gas analyst, Vyacheslav Mishchenko, told news reporters.
“There is already a hike on crude oil prices in the market,” he said. “I think this is a direct impact of the decree.”
Russia is the world’s second largest oil exporter after Saudi Arabia, and a major disruption to its sales would have far-reaching consequences for global energy supplies.