General view of oil tanks in Transneft Kozmino port near Nakhodka, a town in the Far East of Russia.
Yuri Maltsev | Reuters
Russia on Tuesday announced it would ban oil sales to countries abiding by price caps imposed by the West this month, a move taken so far to limit Russia’s ability to raise money for its war in Ukraine. It showed the long-awaited response to the most dramatic measures taken.
Under the price cap, which came into force on December 5, oil traders are lining up Russian seaborne oil to maintain access to Western financing for key aspects of global shipping such as insurance. You must promise not to pay more than $60 per barrel.
The cap is set at a price close to the current price of Russian oil, but well below the price at which Russia was able to sell oil for much of last year.
Russia is the world’s second-largest oil exporter after Saudi Arabia, and any disruption to Russian sales would have far-reaching implications for the world’s energy supply.
Vladimir Putin’s order, published on government portals and the Kremlin’s website, is a direct response to “acts by the United States and other countries and their participating international organizations that are unfriendly and inconsistent with international law.” presented as.
The Kremlin ban will suspend the sale of crude oil to countries participating in the price cap from 1 February to 1 July 2023. A separate ban on refined oil products such as gasoline and diesel will come into effect on a date set by the government. Putin has the power to reverse measures in special cases.
The Western price cap, unseen even during the Cold War between the West and the Soviet Union, effectively increased the Russian treasury and Moscow’s military spending in Ukraine without disrupting markets by blocking Russian supplies. It’s meant to undermine your efforts.
Russia’s fiscal deficit could exceed 2% of GDP projected for 2023, according to Finance Minister Anton Siluanov. This is because the oil price cap will put pressure on Russia’s export earnings. This is an additional financial hurdle for Moscow, which spends heavily on military operations in Ukraine.
Some analysts say the cap is unlikely to have a direct impact on Moscow’s oil revenues, as Russian oil prices have already fallen close to that level. But that could limit Russia’s ability to profit from future price shocks.
ghost town
Russian forces shelled and bombed towns and cities in eastern and southern Ukraine on Tuesday. After a number of dramatic Ukrainian achievements in the fall, the war is entering a slow, wear-and-tear phase as harsh winter weather comes to the fore.
The heaviest fighting will be around the eastern city of Bakhmut, which Russia has been trying to storm for months at great cost to life, and further north of Svatove and Kreminna, where Ukraine is trying to breach Russia’s defensive lines. is the city of
In Bahmut, home to 70,000 people before the war but now a ghost town mostly blown up, a Reuters reporter witnessed a fire burning in a large residential building, debris littering the streets. Windows in most buildings had been blown out.
“Our building was destroyed. There was a store in our building, but now it’s gone,” said 85-year-old Oleksandr, adding that he was the only one left there.
Nearby 73-year-old Piraheia said she had long been accustomed to “constant explosions.”
“Russia continues to launch frequent small-scale attacks in these areas[of Bakhmut and Svatove]but little has changed hands,” the UK Defense Ministry said in an update.
In recent days, Putin has repeatedly expressed his desire for peace talks in his comments. But Foreign Minister Sergei Lavrov said Moscow still has a series of preconditions, including the approval of Ukraine to conquer by force about one-fifth of the Ukrainian territories allegedly annexed by Russia. clarified.
Kyiv says it has won the war and will never agree to give up its land.
TASS quoted Lavrov as saying late Monday: “The demilitarization and de-nazification of regions controlled by the regime and the elimination of threats to Russian security emanating from them, including our new lands. Our proposal for is well known to the enemy.
“The point is simple: do it in your own interest, otherwise the matter will be decided by the Russian military.”
Ukrainian President Volodymyr Zelensky said nearly nine million people, about a quarter of the country’s population, are now without power as a result of the attack on Ukraine’s energy infrastructure.
Russia has openly targeted Ukraine’s energy infrastructure with missiles and drones since October. Moscow says its aim is to reduce Ukraine’s combat capabilities.
What was intended as a campaign to conquer Ukraine within a few days was a Kremlin military debacle that saw troops defeated on the outskirts of Kyiv in the spring and forced to flee elsewhere in the fall.
Putin responded by summoning hundreds of thousands of reservists to fight in his “special military operation” for the first time since World War II.
In the latest humiliating retreat of Russian forces, a suspected Ukrainian drone reached a key base of Russia’s long-range strategic bomber fleet hundreds of kilometers inside Russian airspace on Monday. Moscow said it shot down the drone, but at least he admitted three military personnel were killed.
It was the second time the base had been attacked since the beginning of December, indicating that Russia has yet to close the gap in its air defenses that allowed its bold attack.
