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Russia to ban oil exports to countries with price cap starting February

President Vladimir Putin's decree is seen as a retaliatory mechanism against countries that abide by the West's decision to impose a $60 per barrel price ceiling on Russian oil.

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Russia has said the cap will not affect its military campaign in Ukraine and expressed confidence it would find new buyers.

Russia has issued a decree to ban oil sales to countries and companies that comply with a price cap agreed upon by Western countries in response to Moscow's offensive in Ukraine.

"The supply of Russian oil and oil products to foreign legal entities and individuals is prohibited if the contracts for these supplies directly or indirectly" are using a price cap, the presidential decree said Tuesday.

The decree will take effect from February 1 until July 1 of 2023.

It added that the ban may be lifted in individual cases on the basis of a "special decision" from Russian President Vladimir Putin.

The price ceiling of $60 per barrel agreed by the European Union, G7 and Australia came into force in early December and seeks to restrict Russia's revenue while making sure Moscow keeps supplying the global market.

Introduced alongside an EU embargo on seaborne deliveries of Russian crude oil, the cap aims to ensure Russia cannot bypass the embargo by selling its oil to third countries at high prices.

Russia has said the cap will not affect its military campaign in Ukraine and expressed confidence it would find new buyers.

Russia ranks second to Saudi Arabia as the world's largest producer of crude oil among OPEC+ countries.

According to the International Energy Agency, as of October, Russia produces more than 9.7 million barrels per day of crude oil.

As of November 2021, Slovakia and Hungary were the top two countries in Europe that are part of the Organisation for Economic Co-operation and Development (OECD), which import their oil from Russia.