Western countries have begun imposing a price cap of $60 a barrel and a ban on some types of Russian oil, part of new measures aimed at increasing pressure on Moscow over its war in Ukraine.
The European Union, along with Australia, Great Britain, Canada, Japan and the United States, agreed on the price cap on Friday.
The move has drawn opposition from the Kremlin and also criticism from Ukrainian President Volodymyr Zelenskyy – whose government wants a half-cap.
The European bloc of 27 countries also imposed an embargo on Russian oil shipped by sea.
Questions have arisen about how the Western measures will affect market prices. On Monday, US benchmark crude was up 90 cents at $80.88.
Many other factors, including China’s Covid-19 preventive measures that have hampered production, are also affecting crude oil demand and hence prices. They are far from a peak earlier in the war.
Russian Deputy Prime Minister Alexander Novak, in charge of energy issues, warned in television commentary on Sunday that Russia will not sell its oil to countries trying to use the cap.
“We will only sell oil and oil products on market terms to the countries that work with us, even if we have to partially reduce production,” he said in televised speeches hours before the price cap came into effect.
Ukraine’s government called for a lower price cap of $30 a barrel over the weekend – and said that at $60 Russia would still be reaping $100 billion in annual oil revenues, money that could be used to fund its war machine.
Russia, the world’s second-largest oil producer, relies on oil and gas sales to prop up its economy, which has already come under sweeping international sanctions over President Vladimir Putin’s war in Ukraine.
In recent weeks, Russia has bombarded Ukraine’s infrastructure – including power plants – with military strikes and continued an offensive in the east, particularly in and around the town of Bakhmut.
Russian forces have also dug in near the southern city of Kherson, which was retaken by Ukrainian forces last month after eight months of occupation.
The war, which began with Russia’s invasion of Ukraine on February 24, has displaced millions of people from their homes, killed and injured scores of civilians, and rocked the global economy – particularly by affecting the prices and availability of food, fertilizers and fertilizers Fuels are key exports from Ukraine and Russia.
https://www.independent.ie/world-news/russian-oil-cap-begins-as-west-increases-pressure-on-putin-over-ukraine-42195590.html Russia’s oil cap begins as West ramps up pressure on Putin over Ukraine