Novak spoke about the ineffectiveness of the price ceiling for Russian oil

The price restrictions on Russian oil introduced by the G7 countries and the EU turned out to be ineffective; its price now exceeds the ceiling of $60/barrel. This statement was made by Russian Deputy Prime Minister Alexander Novak on the sidelines of a meeting of the Valdai Club in Sochi.

“Today we see that Brent prices have increased, the discount has decreased, and our products are sold at market prices – above the ceiling. <...> I hope that now everyone is convinced that the tool they came up with is simply ineffective and end consumers suffer from it,” Novak said (quote via Interfax).

The Deputy Prime Minister added that today there is an understanding of “which tools only make things worse.” According to him, the situation with the introduction of the ceiling creates a precedent for the use of such restrictions in the future not only against Russia, but also in relation to other countries and other products.

As Novak noted, Moscow previously warned that the price ceiling would not work. He emphasized that Russian companies do not supply oil within the framework of this restriction and comply with the decree of the President of the Russian Federation.

The price ceiling of $60 per barrel came into force on December 5, along with a ban on Russian oil supplies by sea. For petroleum products, the restriction is valid from February 5, 2023. In addition to the EU, the G7 countries and Australia have joined the price limit.

In response, Russian President Vladimir Putin signed a decree that provides for a complete ban on the supply of Russian oil and petroleum products to foreign companies and individuals if the contracts directly or indirectly provide for a price limit mechanism. Initially, the document was valid from February 1 to July 1, but at the end of June was extended until December 31, 2023