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Russian oil defies Western price caps under new decree: Putin protects economy, energy trade. Check out the details and effects on the global oil market

Written by Noel Budeguer
Published 16/06/2024 às 11:12
Oil - Russia - Putin - trade

Russian measure against oil price limits: Putin prevents exporters from complying with Western restrictions. Learn the consequences for international oil trade

Russian President Vladimir Putin ordered a ban on Russian oil exporters and customs bodies from adhering to oil export limits. tax prices by the West over a barrel of Russian oil. This measure was taken in retaliation for the maximum value of Russian fuel that was set by Western countries, as stipulated in a decree published on the Russian Government website.

Decree and Objective of the Measure

The measure was issued to help comply with Putin's decree of December 27, 2022, which prohibited the supply of crude oil to nations that followed the imposed limits. The price cap aims to paralyze Moscow's military efforts in Ukraine, without altering markets by incurring a blockade of Russian supplies.

Impact on the Oil Market

Hydrocarbon traders who want to maintain access to Western financing for vital aspects of global shipping, such as insurance, must promise not to pay more than $60 per barrel of Russian oil transported by sea. This restriction was introduced to limit Russia's revenue derived from oil exports, decreasing the country's ability to finance its military operations.

Repercussions of the Decision

Russia's decision not to adhere to the Western price limit, in addition to retaliation, ensures that the global oil market is not controlled by external impositions that could harm the Russian economy. Russian customs bodies and oil exporters were instructed to strictly follow the decree, ensuring that Russian oil continues to be sold at prices determined by the market itself or by the Russian government, without Western interference.

Consequences for International Oil Trade

Putin's decision could lead to a reconfiguration of international trade, especially for nations that rely heavily on Russian oil. These countries will have to decide between adhering to price limits imposed by the West, at the risk of losing access to Russian oil, or defying these limits to ensure continuous supply.

Future of the Oil Market

With oil being a critical resource in the global economy, Russia's decision to defy Western-imposed price caps could create new dynamics in the market. Countries that depend on Russian oil will have to adjust their policies and strategies to ensure a stable supply. Furthermore, the role of customs bodies will be crucial in implementing these new guidelines, ensuring that Russian oil exports are not affected by external restrictions.

This assertive approach by Russia could lead to an increase in tension between Western nations and Russia, with potential repercussions for the stability of the global hydrocarbons market. Oil will continue to be a central element in discussions on energy and economic policies in the coming years, highlighting the importance of controlling natural resources in geopolitical contexts.

With these measures, Russia intends to maintain its autonomy and control over one of its most valuable resources, demonstrating resistance to external pressure and seeking to strengthen its position in the global black gold market.

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Noel Budeguer

Of Argentine nationality, I am a news writer and specialist in the field. I cover topics such as science, oil, gas, technology, the automotive industry, renewable energy and all trends in the job market.

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