Restrictions on the price of Russian oil and the European embargo come into force

The upper limit refers to the oil that Moscow exports by sea to the world.

The decision to cap the price of Russian oil at $60 per barrel allows it to be sold to third countries using G7 and EU tankers, their insurance companies and credit institutions, but only if the oil is sold at a price below $60.

Because key shipping and insurance companies are located in G7 countries, the price cap could make it harder for Moscow to sell oil for a higher price

But Moscow said it would not abide by the decision, even if it had to cut production.

Alexander Novak, Russia’s deputy prime minister in charge of energy, said they were working “on mechanisms to prohibit the use of the price cap instrument, regardless of the level at which it is set, because such interference could further destabilize the market.”

Ukraine, on the other hand, demanded that the price be limited to 30 dollars per barrel. But the West fears that too low a price could lead to Russia pulling crude from the market, leading to a big spike in prices.

Ukrainian President Volodymyr Zelensky said on Saturday that capping the price of Russian oil at $60 is not serious and will hardly deter Russia from the war in Ukraine.

Andriy Yermak, the head of Zelensky’s administration, previously said the limit should be set at $30 “to destroy the enemy economy faster.”

The price cap will be reviewed by the EU and the G7 every two months.

The EU embargo on Russian oil imports was agreed in June as part of a package of sanctions against Russia over its invasion of Ukraine.

The exceptions are Hungary, Slovakia and the Czech Republic, three EU member states that are particularly dependent on Russian oil due to their geographical location and the inability to replace these imports in a short time.

In two months, on February 5, the embargo for oil derivatives will come into force.