Chinanews.com, December 28. After the Western measures to limit the price of Russian oil came out, Russia has repeatedly stated publicly that it will not sell oil to the price-limiting countries and has introduced countermeasures.
On the 27th local time, Russian President Vladimir Putin signed a presidential decree resolutely countering the Western price cap on Russian oil.
In this presidential decree, what kind of countermeasures did Putin propose, and what impact will it have on the energy market?
US West: Price limit! Russia: I will not sell you!
The presidential decree is titled "Order to adopt special economic measures in the field of oil and energy in response to certain countries imposing ceiling prices on Russian oil and oil products."
Presidential decree signed by Putin.
Image source: Russian legal information official website
According to the order, if the Western price-limiting mechanism is directly or indirectly introduced into the supply and marketing contract, the Russian side will prohibit the supply of Russian oil and oil products to relevant foreign legal persons and natural persons, and the ban applies to all stages of external oil supply.
The order is effective from February 1, 2023 and will be valid until July 1, 2023.
In other words, starting from February next year, if a foreign customer who signs a contract with Russia directly or indirectly adopts the price limit mechanism for Russian oil at any stage of oil supply, sorry, it will not be sold!
Russia and the United States and other Western countries have been wrestling over oil for a long time.
The Group of Seven (United States, United Kingdom, France, Germany, Japan, Italy and Canada) has held several rounds of discussions on whether to set a cap on Russian oil export prices since September this year.
In early December, EU member states finally reached an agreement on setting a price cap of $60 a barrel for seaborne oil exports to Russia.
The Group of Seven and Australia also announced the implementation of the same price cap policy as the European Union.
The price limit policy came into effect on December 5.
Russia has repeatedly said it will not sell oil to countries that make such decisions.
He also stated that the price limit on Russian oil will disrupt the energy market, because too low oil prices will lead to insufficient investment and shortage of funds in the oil industry, which may lead to a catastrophic surge in oil prices and a collapse of world energy at a certain period.
How will it affect the energy market?
The presidential decree signed by Putin pointed out that Russia took such countermeasures to protect Russia's national interests in view of the unfriendly actions of the United States and other Western countries and violations of international law.
Data map: Putin.
Before the order was issued, Russian Deputy Prime Minister Novak had warned that Russia may cut oil production by 5% to 7% in early 2023, and the reduction may reach 500,000 to 700,000 barrels per day.
He also said that despite European efforts to reduce dependence on Russian oil and gas, Russian energy exports are in demand around the world, and Russia has been seeking to diversify its buyers.
Reuters reported in a report that such a price ceiling did not even appear during the Cold War between the West and the Soviet Union. The West's move was to "weaken the Russian state treasury and its military operations in Ukraine."
But some analysts believe that the price cap will have little direct impact on Russia's current oil revenues.
The British media believes that for weeks, Russia has promised to make a formal response, and the final decree largely confirms what officials have said publicly.
Before and after Russia's countermeasures against the West's price limit on Russian oil, there was also a subtle episode.
According to "Russia Today" (RT) reports, the website of the Russian State Oil Pipeline Transportation Company announced on the 26th that starting from January 1 next year, the transit of Russian oil transported through Ukraine to EU countries through the "Friendship" oil pipeline Transportation costs are expected to rise, with a total increase of 18.3%.
On the one hand, Russia counterattacks, and on the other hand, Ukraine plans to increase the "toll". It remains to be seen what changes will occur in European oil prices.
According to Reuters, on the 27th, the trading price of Russia's Urals crude oil was about 56 US dollars per barrel, which was lower than the price ceiling level set by the West.
Affected by the news, Brent crude oil rose slightly, rising 1.4% to $85.1 on the afternoon of the 27th.
Russia and the West "have nothing to talk about"
Medvedev, vice chairman of the Russian Federal Security Council, published an article in the "Russia Gazette" a few days ago, saying that Russia no longer has reason to negotiate with the West.
He pointed out that the crisis in Ukraine has worsened in the past year, and the words and deeds of Western leaders are shocking, which has obliterated mutual trust and respect between Russia and the West, and obliterated the possibility of dialogue.
Russian Foreign Minister Sergey Lavrov's statement in an interview with the TASS news agency a few days ago also reflects that the relations between the United States and Russia and Russia and Europe continue to be cold.
He said that the U.S. military is publicly planning orders for the U.S. defense industry in the next few years, and continuously increasing military spending standards to meet the needs of the Ukrainian armed forces. "The United States is doing everything it can to prolong the conflict and make it more violent."
Regarding Europe, Lavrov said relations between Russia and the European Union are currently "at an all-time low."
Russia has no intention of launching more joint projects with the EU, nor will it appoint a new Russian permanent representative to the EU anytime soon.