Russia leaves open for a tougher response in regards to the oil price cap

Russia's response to the G7 price cap on oil corresponded to the promises previously voiced by state representatives, without having a major impact on global fuel supplies. But the country leaves open for a more decisive move to the EU-imposed price threshold for raw materials. 

Under the decree signed by the Russian government on Tuesday, oil and petroleum product supplies are banned for foreign consumers that adhere to the price threshold for Russian fuel. This order is more likely to be nominal as the states that signed the price cap treaty have already stopped purchasing it. 

On the other hand, the presidential decree is extended to the contracts, which contain, directly or indirectly, "the mechanism of price limit”. This statement might be interpreted rather widely. The decree would also be relevant for previously concluded deals, as long as there is a reference to the price threshold. 

Since Russia's restrictions on the export of crude oil will take effect on February 1, the government has several weeks to consider further retaliatory measures. Besides, the cabinet should determine the start date of the ban on petroleum products, as well as their full list.