Putin signs the decree on counter measures for Russian oil price cap.

The Kremlin has repeatedly blasted the price cap introduced by Western countries as unacceptable for Russia, underlining that the country will never agree to such destruction of market pricing.

Russian President Vladimir Putin has approved a decree on special measures in connection with the price cap on Russian oil, prohibiting the delivery of oil and petroleum products if the contracts envisage price limits.

The decree banning supply of Russian oil products under price cap comes into force on February 1, 2023, while the ban on petroleum products will be defined later by the Cabinet of Ministers.

However, the decree envisages that the president may grant special permission for products supply prohibited under the price cap. The decree will remain in force until July 1, 2023.

Earlier on Sunday, Kremlin spokesman Dmitry Peskov said that oil and gas price ceilings are unacceptable to Russia, and the country will never agree to the destruction of market pricing.

Responding to the initiative to impose a price cap on Russian gas, Putin called it an attempt at administrative regulating.

“You know, this is a slightly different regulation than an attempt to regulate oil prices. Here, the European Commission talked more about the need to regulate the situation on the stock exchange, linking to LNG, saying that prices should be correlated with LNG prices and so on, but still it is an attempt to administratively regulate prices,” Putin said, adding that Moscow reserves the right to retaliate in case it violates Gazprom’s contracts.

The European Union’s $60 per barrel price cap on Russian oil went into effect on December 5, together with a ban on seaborne exports. The cap will be reviewed every two months to remain at 5% below the International Energy Agency benchmark. The G7 nations and Australia have also capped Russian oil exports at $60 per barrel.