Russian President Vladimir Putin on Wednesday announced a ban on oil exports to the U.S. and other Western nations that recently imposed a price cap on Russian crude as punishment for Moscow’s war in Ukraine.
A Kremlin statement announcing the ban said Mr. Putin had signed it as an executive order “in response to the unfriendly actions taken by the United States, other foreign states and international organizations that sided with them to establish a price cape on Russian oil.”
The Group of Seven forum of wealthy Western powers, along with Australia and the European Union, issued a $60-per-barrel price cap in early December on Russian crude moving around the world. The measure added to economic sanctions the West has imposed on Russia in response to its invasion of Ukraine.
The cap is close to the current price for Russian oil, but well beneath the windfall price Russia was able to sell for this year and that helped offset the impact of financial sanctions on Moscow, according to Reuters.
The news agency noted Wednesday that Russia is the world’s second-largest oil exporter after Saudi Arabia, and a major disruption to its sales would have deep consequences for global energy supplies.
It was not immediately clear how Mr. Putin‘s executive order may affect global oil prices. The Kremlin said the order will take effect Feb. 1 and remain in place until July, although “special” exceptions for certain exports may be allowed through a process overseen by the Russian president.
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“The Executive Order has established that in connection with the ban imposed by the United States, and other foreign countries that sided with them, on the transport of Russian oil and oil products and related services,” the Kremlin said in a statement. “Russia bans the sale of oil and oil products to foreign companies and individuals if the contracts on these sales include the use of this mechanism directly or indirectly. The established ban applies to all stages of sales up to and including the final buyer.”