Russia Bans Sale of Oil to Countries Going Along With G7 Price Cap
On December 29, 2022, Russia announced its plans to ban oil sales to countries that comply with a price cap enacted this month by the Collective West.
The Collective West has imposed this cap in an attempt to stifle Russia’s ability to finance its military incursion in Ukraine.
The price cap went into effect on December 5 and compels oil traders to not pay more than $60 per barrel for Russian seaborne oil in order to continue receiving Western financing for important components of global shipping as insurance.
The cap was fixed close to Russian oil’s current price. However, this cap was fixed well below the prices at which Russia was able to sell oil for much of the last year — a time when soaring energy profits helped Russia cushion the impact of the sanctions war the Collective West has launched against it.
CNBC reported that Russia is the second largest oil exporter in the globe next to Saudi Arabia, so any type of shock towards its oil sales could lead to global energy shocks.
Russian President Vladimir Putin published a decree on the government’s website where he stated that the action was a response to “actions that are unfriendly and contradictory to international law by the United States and foreign states and international organisations joining them”.
This ban would stop crude oil sales to countries engaging in the price cap from February 1 to July 1, 2023. An additional ban on refined oil products such as diesel and gasoline would go into effect on a future date that the Russian government has yet to officially determine.
The Collective West’s price cap is designed to weaken the Russian government financially and stymie Russia’s military excursion in Ukraine. However, as seen with previous sanctions efforts and other measures to financially punish so-called “rogue” nations, this latest price cap will do nothing to stop Russia’s military campaign.
If anything, this latest measure will likely push Russia closer to China and the rest of the Eurasian axis. That’s the new reality of the multipolar order. Many of the geopolitical armchair strategists in DC will be in for a rude awakening as they see their universalist agenda receive more pushback abroad.