Russian President Vladimir Putin has signed a law to introduce countermeasures against the recently imposed price cap on Russian oil.
The law bans oil exports to legal entities and individuals that use price cap mechanisms when signing contracts.
At the same time, the president can greenlight oil supplies in individual cases.
The law will enter into force on 1 February, but the decision will be applied from a certain date that the government will choose which cannot be earlier than 1 February.
The Russian Energy Ministry is responsible for overseeing the measure.
The EU and G7 countries agreed to impose a price cap on Russian oil at $60 per barrel in early December. Hungary received an exemption from following the rule.
Bloomberg cited anonymous sources to report that Russia could respond by imposing a minimal price for its oil. Moscow was reportedly also considering a fixed price per barrel of the Russian crude or set a maximum discount that it can be sold with.
Bloomberg was also writing that the Kremlin was drafting a decree that would ban Russian companies and international traders who buy Russian oil from reselling it to those who took an obligation to observe the price cap.
Russia’s Vedomosti, in turn, wrote that Moscow could use 3 countermeasures: a full ban on oil sales to countries that backed the price cap, a ban on exports under contracts that include a price cap provisions irrespective of the receiving country or a maximum discount on Russia’s Urals in comparison with the benchmark Brent.
The law that Putin signed today was announced by Russia’s Deputy Prime Minister Alexander Novak on 23 December.
“This decree also includes a ban on supplies of oil and petroleum products to the countries and to legal entities that would insist on including the price cap imposed by the European Union in contracts,” Novak said.
