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Russia bans oil exports to countries using price cap

Russia has banned the sale of oil to countries and companies that are currently complying with the price cap agreed by Western nations earlier this month.

The price cap which was agreed by the G7 group of nations, Australia and the EU came into force on December 5.

The price cap aims to reduce Russian oil revenue and to stop Russian crude sold for more than $60 from being shipped using G7 and EU tankers, insurance companies and credit institutions.

The cap prohibits countries from paying more than $60 per barrel of Russian oil.

Russia says its oil and oil products will not be sold to any countries imposing the price cap.

The presidential decree also added that the ban would take effect for five months from February 1 to July 1.

The decree indicates that Russian President Vladimir Putin, could give “special permission” to supply to countries that fall under the ban.

The G7 group of major economies put forward the idea of a price cap in September to stop Moscow from using oil revenue to finance the war in Ukraine.

Although western demand for Russian oil fell after the invasion, Russian revenue remained high due to a price spike and demand elsewhere, including India and China.

An EU-wide ban on Russian crude oil imported by sea is already in place, with similar pledges from the UK, US, and other countries.

Many major global shipping and insurance companies are based within the G7.

Oil is currently trading at around $80 a barrel which is well down from the peaks of above $120pb, seen in March and June of this year.

Writing by Tersoo Nicholas; Editing by Julian Osamoto & Adeniyi Bakare