Russia denies G7 oil price cap

Russia said it would not accept the $60 a barrel price cap implemented by the G7 nations and its allies on oil and would sell its resources at market price.

The price cap goes into force today.

Moscow further says it would cut off oil exports to countries that comply with the G7 cap.

The barrel price cap and the EU’s oil embargo mark the most recent attempts by the West to hit Moscow’s funding for the war against Ukraine. This year, oil and gas sales are estimated to account for 42% of Russia’s total revenue.

Russian oil would be shipped to third-party countries only if the cargo’s cost complies with the price cap. The main purpose of this measure is to add more pressure on Russia’s finances while avoiding a sudden price hike of oil in the global market.

To ensure a $60/barrel cap on Russian oil, G7 has asked Western countries—responsible for a large number of seaborne exports—not to ship, finance or insure Russia’s oil if it’s beyond that price.

The Russian economy
Despite the measures taken, the Russian economy might experience a minimal blow as the country would continue selling its resources to China, India, and Turkey, its largest buyers.

Russia has also said to assemble a ‘shadow fleet’ of over 100 tankers to reduce the country’s dependency on foreign transport for its oil.