Russia “will not accept” a price cap on its oil

Russia will not accept a price cap for its oil and is looking at how to respond to it, the Kremlin stated in comments published Saturday in response to a Western deal that would limit a major source of financing for its war in Ukraine.

Dmitry Peskov, a Kremlin spokesperson, said that Moscow had prepared for Friday’s price caps announcement by the Group of Seven countries, the European Union, and Australia, according to the Russian state news agency TASS.

According to the RIA news agency, he said that “we will not accept this cap.” According to RIA, he said that Russia would quickly analyze the agreement and then respond.

Russia has stated repeatedly that it won’t supply oil to countries which implement the cap. This stance was reaffirmed Saturday by Mikhail Ulyanov (Moscow’s ambassador to international organizations in Vienna), in posts on social media.

He stated, “Starting this year Europe will be without Russian oil.”

Non-EU countries will be able to continue to import seaborne Russian crude oil from the G7, but shipping, insurance, and reinsurance companies will not be allowed to handle cargoes of Russian crude oil around the world unless it is less than $60. This could make it difficult to ship Russian crude oil priced higher than the limit, even to non-member countries.

Russian Urals crude oil traded for around $67 per barrel on Friday

Janet Yellen, U.S. Treasury Secretary, stated that the cap will be particularly beneficial to low- and middle-income countries that have borne the brunt of high food and energy prices.

“With Russia’s economy already shrinking and its budget becoming increasingly stretched thin,” Yellen stated in a statement.

Telegram published comments by the Russian Embassy in America criticizing the “dangerous” Western move. Moscow said it would continue to find buyers of its oil.

It stated that “Steps such as these will invariably result in increasing uncertainty, and imposing higher prices for raw material’s consumers,”

“Despite the flirtations with this dangerous and illegal instrument, we remain confident that Russian oil is still in demand.”

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