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Russia has decided to impose a ban on the sale of crude oil and oil products to countries that comply with price cap imposed by US-led western alliance.
A decree has been signed by Russian President Vladimir Putin to prohibit the supply of crude oil and oil products from 1 February next year for five months, reported Reuters.
The group of seven major nations, the European Union (EU) and Australia have implemented a $60-per-barrel price cap on Russian seaborne crude oil from 5th December.
This decision has been taken to increase pressure on Russia as a result of its military action against Ukraine.
The price cap is near Russian oil’s current price, but it is below the windfall price expected by the country to sell this year.
Published on a government portal and the Kremlin website, the decree is a direct response to “actions that are unfriendly and contradictory to international law by the US and foreign states and international organisations joining them.”
As per the news agency, the decree stated: “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 G7 price cap is expected to allow non-EU countries to continue to procure seaborne Russian crude oil, but it will restrict shipping, insurance and re-insurance firms from handling cargoes of Russian crude across the world.