Russia will keep looking for buyers for its oil despite a “dangerous” attempt by the West to introduce a $60 price cap on Russian oil amid a pressure campaign against Moscow over the war in Ukraine, the Russian embassy in the United States says.
The price cap was agreed upon by a coalition of Western countries led by the G7 group of nations on Friday. It is essentially meant to restrict Russia’s revenues for the “illegal war in Ukraine.” The oil customers will pay no more than $60 (£48) for a barrel of seaborne Russian crude oil.
From December 5 onward, Western shipping and insurance companies would be prohibited from handling Russian oil sold above the price cap.
In Washington, Russia’s embassy said the latest attempt was part of a larger plan for “reshaping” the free market principles.
The embassy said in a statement published on Telegram that Russia’s oil would still continue to be in demand. “Steps like these will inevitably result in increasing uncertainty and imposing higher costs for raw materials' consumers.”
“Regardless of the current flirtations with the dangerous and illegitimate instrument, we are confident that Russian oil will continue to be in demand.”
Ukraine’s presidential chief of staff Andriy Yermak has welcomed the move. Yermak said on Saturday, “Russia's economy will be destroyed, and it will pay and be responsible for all its crimes.”
The White House said the price cap deal was “welcome news.” The limit, it said, will help restrict Russian President Vladimir Putin’s ability to fund the Kremlin’s “war machine.” US Treasury Secretary Janet Yellen said, “With Russia's economy already contracting and its budget increasingly stretched thin, the price cap will immediately cut into Putin's most important source of revenue.”
Senior Russian politician Leonid Slutsky said Russia can partially annul the restriction by moving to sell its oil to other markets such as India and China.
Citing an oil ministry source, Reuters reported on Friday that New Delhi will continue buying Russian oil and even look for term contracts as sanctions allow purchases provided that Western services are not used.
On November 29, President Xi Jinping of China reassured that he is willing to build a closer partnership with Russia in energy cooperation.
China and India are currently the largest single buyers of Russian crude oil.