President Vladimir Putin signs decree to ban sale of countries backing price cap

New Delhi, Dec 28: Russian President Vladimir Putin has signed a decree to ban sale of oil to countries and companies which are backing G7 and European Union's newly imposed price cap on Russian seaborne oil.

According to the decree, "the supply of the Russian oil and oil products to foreign legal entities and Individuals is prohibited if the contracts for such supplies directly or indirectly use the oil price cap."It further said that it has been issued to protect national interest of the Russian Federation and in accordance with the federal laws on special economic measures and coercive measures federal laws on security and federal laws on 'measures to influence (counter) unfriendly actions against the United States of America and other foreign countries'.

The decree Alsop says that the supply of Russian oil and oil products to foreign legal entities and individuals persons is prohibited if such entities and individuals expressly and indirectly support the price cap. The prohibition also applies at all stages of supply to the final buyer, the decree noted.

This comes after the G7 and European Union on December 3 agreed upon imposing a price cap of $60 per barrel on Russian seaborne oil. This was in response to Russia's offensive in Ukraine. According to the regulations of the EU and G7 imposed price cap, G7 and ED based insurance and reinsurance companies that provide service for tankers carrying Russian crude oil as well as institutions financing Russia crude transactions will not be allowed to handle such cargos. This is until the oil is brought below the price cap. The price cap came into effect on December 5. Shipping companies will not be allowed to provide tankers for the transport of Russian crudes unless the oil is sold at or below the price cap.

Russia had rejected the West's price cap and had said that it may soon ban oil exports to countries backing the cap.

The Executive Order has established that in connection with the ban imposed by the United States, and other foreign countries that sided with them, on the transport of Russian oil and oil products and related services, which is applied if the price of Russian oil and oil products is above the limit established by said foreign states (price limit mechanism), Russia bans the sale of oil and oil products to foreign companies and individuals if the contracts on these sales include the use of this mechanism directly or indirectly. The established ban applies to all stages of sales up to and including the final buyer, the decree said.