Russia has stopped supplying oil to countries that have imposed price ceilings

In Russia, on February 1, a ban on the supply of oil to “unfriendly” countries, which imposed a price ceiling on it, entered into force.

According to the decree of President Vladimir Putin, signed on December 27, the supply of Russian oil and petroleum products to foreign citizens and companies is prohibited if the contracts “directly or indirectly provide for the use of the marginal price fixing mechanism.”

Export of oil at a limited cost is allowed only with the permission of the president. The ban will be in effect from February 1 to July 1, 2023. The government will determine the validity period of the ban on the supply of petroleum products.

• On December 5, 2022, the price ceiling for Russian oil exported by sea at $60 per barrel came into effect. The measure was included in the eighth package of EU anti-Russian sanctions.
• The countries of the West set limit prices in order to reduce Russia’s income, which helps it continue the war in Ukraine, and at the same time prevent the cessation of supplies and the jump in world prices.
• The price ceiling means that the Group of Seven countries and the European Union will provide insurance and financial services related to Russian petroleum products only if they are purchased at or below the limit price.
• After the introduction of the price ceiling, the Russian oil market became very opaque. According to official data, Russia is forced to sell oil at 47 dollars per barrel, but the real price is “most likely 70-75 dollars per barrel”, according to Sergey Vakulenko, a consultant of Russian and international companies on the oil and gas markets.