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Kremlin rejects price cap put on its oil by US, allies as unacceptable; Kiev says it lacks serious effect

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
File photo of a pump jack at a Russian oil facility (Via Moscow Times)

The Kremlin has rejected a $60-per-barrel price cap that the US and its allies in the European Union and the Group of Seven have agreed to place on Russian oil imports as an alleged attempt to starve Moscow's ongoing military campaign in Ukraine.

"We will not accept this price cap," spokesman Dmitry Peskov told domestic news agencies on Saturday, adding that Moscow was "analyzing" the move.

The bloc and the Group of Seven industrialized nations -- that includes the UK, Germany, Italy, Canada, the Unites States, France, and Japan -- announced the agreement alongside Australia on Friday, saying they would start imposing the price ceiling on Monday.

The EU is also slated to start enforcing an oil embargo of its own on Russian crude deliveries that would ban seaborne shipments, which reportedly account for two thirds of the imports.

The G7 said by employing the cap, it was delivering on its vow "to prevent Russia from profiting from its war of aggression against Ukraine, to support stability in global energy markets, and to minimize negative economic spillovers of Russia's war of aggression."

Russia's war on Ukraine started in late February with Moscow saying that it was aimed at defending the pro-Russian population in the eastern Ukrainian regions of Luhansk and Donetsk against persecution by Kiev.

Ever since the beginning of the war, Kiev's Western allies, led by the US, have been pumping Ukraine full of advanced weapons and slapping Russia with a slew of sanctions, steps that Moscow says will only prolong the hostilities.

The White House has described the price cap deal as "welcome news," saying the agreement would help limit Russian President Vladimir Putin's ability to fund the Kremlin's "war machine."

Ukraine's Zelensky: Russian oil price cap "not serious"

Ukrainian President Volodymyr Zelensky, however, downplayed the measure, saying it would not do enough to keep the Russian military campaign in check.

"Now the world discussion on price caps, that is on limiting the export price of Russian oil, has ended, unfortunately, with no serious decisions. Because you wouldn't call it a serious decision to set such a limit for Russian prices, which is quite comfortable for the budget of" Russia, he said in his video address.

The Ukrainian president added, "Russia has already caused colossal losses to all countries of the world by deliberately destabilizing the energy market. And the world cannot dare (to trigger) its real energy disarmament. This is a weak position."

"It's only a matter of time before stronger tools will have to be used anyway. It is a pity that this time will be lost," he added.

Andriy Yermak, head of Zelensky's administration, also said the cap should have been set at $30 a barrel "to destroy the enemy's economy quicker."

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