Russia says won’t recognise any Western price cap on its oil

As Western countries introduced a price ceiling on seaborne crude oil of Russian origin from Monday, Moscow has once again made it clear that it will not recognise any price cap “rolled out for political reasons” even if it results in reducing production marginally.

In October, the European Union (EU) adopted a decision prohibiting the maritime transport of Russian crude oil (December 5) and petroleum products (as of 5th February 2023) to third countries.

Following agreement by the 27 EU Member States, the G7 (the United States, Canada, France, Germany, Italy, Japan, and United Kingdom) and Australia (collectively, the ‘Price Cap Coalition’) joined in adopting a price cap of $60/barrel on seaborne crude oil of Russian Federation origin.

“The price cap on Russian oil will limit price surges driven by extraordinary market conditions and drastically reduce the revenues Russia has earned from oil after it unleashed its illegal war of aggression against Ukraine. It will also serve to stabilise global energy prices while mitigating adverse consequences on energy supply to third countries,” the EU said in a statement on Saturday.

Washington stated that the policy limits Kremlin revenues, stabilizes global energy supply and is especially critical to make oil supplies available in low and middle income countries hit hard by the effects of ongoing conflict in Ukraine.

“The price cap will be of particular benefit to emerging markets and low-income economies that are highly exposed to rising energy prices. Russia’s unconscionable war in Ukraine has disrupted energy markets and caused widespread economic hardship,
from natural gas shortages in Europe to elevated oil prices around the globe,” said the US Treasury Department.

Calling the move “notorious”, Russia accused the collective West of trying to resolve the issues it itself “impetuously created”.

Moscow alleged that “strategists in Washington” are “hiding behind noble slogans” of ensuring energy security for developing countries while maintaining a wall of silence on the fact that current imbalances in the energy markets “stem from their ill-conceived actions”.

“In fact, we are witnessing a reshaping of the basic principles of free markets. Steps like these will inevitably result in increasing uncertainty and imposing higher costs for raw materials’ consumers. Moreover, from now on no country is immune to the introduction of all sorts of ‘caps’ on its exports, rolled out for political reasons,” commented the Russian Embassy in Washington on its Telegram account.

It added that regardless of the current flirtations with the “dangerous and illegitimate instrument”, Russia is confident that its oil will continue to be in demand.

On Monday, Russian President Vladimir Putin’s Press Secretary Dmitry Peskov said that the oil price ceiling will not affect its goals in the ongoing Special Military Operation in Ukraine.

“The decision is being prepared, one thing is obvious: we will not recognise any ceilings… The economy of the Russian Federation has the necessary potential to fully meet all the needs and requirements within the framework of the NWO, such measures will not affect its course,” Peskov maintained.

As reported by IndiaNarrative.com last week, while speaking on European concerns about energy security, Russian Foreign Minister Sergei Lavrov stressed that Moscow is not just thinking about getting more revenue for oil but concentrating on building a system independent of the “neo-colonial methods”.

“When we are negotiating with China, India, Turkey and other major buyers, there is always an element of balance of interests in terms of time, volume and price. This should be decided on a mutual basis between the producer and the consumer, and not some ‘uncle’ who decided to punish someone,” said Lavrov while speaking with reporters in the Russian capital last Thursday.

Also Read: India aserts it follows an independent foreign policy after Lavrov’s comment