Russia rejects 60 dollar-per-barrel cap on its oil and warns of cut-offs

Russian authorities have rejected a price cap on the country’s oil set and threatened to stop supplying the nations that endorsed the cap.

The Group of Seven nations (G7) and Australia agreed on Friday to adopt a 60 dollar-per-barrel price cap on Russian oil, acting shortly after the European Union reached unanimous agreement on the same price earlier in the day.

The limit is set to take effect on Monday, along with an EU embargo on Russian oil shipped by sea.

Kremlin spokesman Dmitry Peskov said Russia would not accept the price ceiling, while Russia’s permanent representative to international organisations in Vienna, Mikhail Ulyanov, warned that the cap’s European backers would come to rue their decision.

“From this year, Europe will live without Russian oil,” Ulyanov tweeted. “Moscow has already made it clear that it will not supply oil to those countries that support anti-market price caps. Wait, very soon the EU will accuse Russia of using oil as a weapon.”

The office of Ukrainian President Volodymyr Zelensky, meanwhile, called for a lower price cap, saying the one adopted by the EU and the Group of Seven leading economies did not go far enough.

“It would be necessary to lower it to 30 dollars in order to destroy the enemy’s economy faster,” Andriy Yermak, the head of Zelensky’s office, wrote on Telegram, staking out a position also favoured by Poland — a leading critic of Russian President Vladimir Putin’s war in Ukraine.

The price cap aims to put an economic squeeze on Russia and further crimp its ability to finance a war that has killed an untold number of civilians and fighters, driven millions of Ukrainians from their homes and weighed on the world economy for more than nine months.