Russia “won’t accept” price cap on its oil

Russia has rejected a price cap on its oil, indicating it may stop supplying to countries that agree to the limit.

Driving the news: The announcement comes after the Group of Seven nations, the European Union and Australia agreed to cap the price of Russian seaborne oil at $60 per barrel starting on Dec. 5.

What they’re saying: “We won’t accept the price cap,” Kremlin spokesman Dmitry Peskov said per Russian state news agency TASS.

  • Peskov added that Russia will assess the situation and decide how to respond.

Between the lines: Russia has said in the past that it will not supply oil to countries that implement the cap, per Reuters.

  • “Starting from this year Europe will live without Russian oil,” Mikhail Ulyanov, Moscow’s ambassador to international organizations in Vienna, said on Twitter Saturday.
  • “Moscow has already made it clear that it will NOT supply oil to those countries who support anti-market price cap,” he continued. “Very soon the EU will blame Russia for using oil as a weapon.”

Meanwhile, U.S. Treasury Secretary Janet Yellen said in a statement Friday that the price cap will particularly benefit low- and medium-income countries that have “borne the brunt of elevated energy and food prices exacerbated by Putin’s war.”

  • She said the price cap will “help further constrain Putin’s finances and limit the revenues he’s using to fund his brutal invasion.”
  • “With Russia’s economy already contracting and its budget increasingly stretched thin, the price cap will immediately cut into Putin’s most important source of revenue.”

State of play: The Russian oil and gas sector will never fully recover from the fallout of the invasion of Ukraine, per a report from a top global energy agency, weakening an important part of the country’s economy for decades to come, Axios’ Ben Geman wrote.