Moscow plans to face Russian oil price cap.. Details coming ‎soon

The Russian Energy Ministry said on Tuesday that it is developing new measures to limit the reduction in Russian oil prices compared to global benchmarks, after the West imposed a price cap.

According to Reuters, Russia is the second largest oil exporter in the world after Saudi Arabia, and its oil and gas sales represent nearly half of its budget revenues.

Last month, Russian President Vladimir Putin signed a decree banning the supply of crude oil and petroleum products to countries that adhere to the maximum price of Russian oil, starting from the first of February for a period of five months.

Russia usually sells oil at a discount to global benchmarks such as Brent crude. This discount increased in the wake of Western sanctions imposed on Russia because of its invasion of Ukraine, and now the discount rate ranges between 25 and 30 dollars per barrel against dated Brent crude.

“The presidential decree published in December prohibits Russian companies from being guided by illegal restrictions represented in setting a ceiling on the oil price, whether directly or indirectly,” the Energy Ministry said in a statement. This ban extends to any transactions with Russian crude oil until it reaches the end user, which means not to work with traders who do not comply with the decision.

The Ministry added, “Details of the decree will be published soon, in addition to details about procedures for controlling prices and discounts.”