A Group of Seven price cap on Russian marine oil came into effect on Monday as the West tries to limit Moscow’s ability to finance its war in Ukraine, but Russia has said it will not abide by the measure, even if He had to cut production.
The price cap, to be implemented by the G7, the European Union and Australia, comes on top of an EU ban on Russian crude imports by sea and similar pledges by the United States, Canada, Japan and Britain.
It allows Russian oil to be shipped to third party countries using G7 and EU tankers, insurance companies and credit institutions, only if the cargo is bought at or below the price cap.
Because the world’s major shipping and insurance companies are based in G7 countries, the cap could make it difficult for Moscow to sell its oil at a higher price.
Russia, the world’s second-biggest oil exporter, said on Sunday it would not accept the cap and sell oil under it, even if it had to cut production.
Selling oil and gas to Europe has been one of Russia’s main sources of foreign exchange income since Soviet geologists discovered oil and gas in the swamps of Siberia in the decades following World War II.
A source told Reuters on condition of anonymity because of the sensitivity of the situation that an order is being prepared to ban Russian companies and traders from interacting with countries and companies directed by the cap.