Free Market for Me, Not for Thee: Which Countries Adopted Price Cap on Russian Oil

The US, Britain, and the EU started rolling out sanctions against Russia after the start of the special op in Ukraine this February. Several rounds of restrictions seriously destabilized energy markets and led to skyrocketing prices worldwide. Now, they are trying to add even more sanctions, attempting to force Russia to sell its oil cheap.

On December 5, a price cap on Russian oil came into effect. The controversial step was adopted by the G7 nations, the EU (which is closely associated with the Group of Seven) and Australia, setting the maximum price at $60 per barrel. The cap is to be reviewed every of month to remain at 5 percent below the International Energy Agency (IEA) benchmark.

The restrictions approved by the West have several exemptions: the sanctions do not apply to pipeline supplies of crude, which are sent to Europe from Russia via the Druzhba pipeline. The Sakhailin-2 oil and gas project, which includes Japan, is also off the sanctions list.

While the European Union, Britain, the US and their allies have imposed a restriction on the Russian oil, Moscow has significantly boosted its fuel deliveries to other countries, such as India and China. Russian authorities stressed they won't accept the price cap and would be only selling oil to those nations that are ready to trade with Russia according to market conditions.

Reports suggest that Moscow is now considering several responses, including a full-scale ban on crude oil sales to the countries that approved the cap, or ban on any contracts that include oil price cap-related clauses.