UPDATE - Putin prohibits supplying Russian oil to countries using oil price cap

UPDATES WITH DECREE'S DETAILS, MINOR CHANGES

By Eena Teslova

MOSCOW (AA) – Russian President Vladimir Putin on Tuesday signed a decree prohibiting supplies of oil and petroleum products to countries which imposed a price cap on Russian fuel.

The decree, published on the governmental portal, comes into effect on Feb. 1 and will be valid until July 1, 2023.

The ban is applicable to contracts which "expressly or indirectly" contain either the term "price cap" or a mechanism for setting a price limit at any stage of supply from the producer to the end buyer.

Supply of Russian oil and petroleum products to countries that have introduced a price cap will be possible only on the basis of a special resolution from Putin, the decree said.

Russia’s Energy Ministry has also been instructed to monitor compliance with the decree on retaliatory measures.

"This decree implies a ban on the supply of oil and oil products to those countries and those legal entities that will require compliance in contracts with the price ceiling introduced by the European Union," Deputy Prime Minister Alexander Novak told Russian state TV.

Last Friday, Russia vowed such a move, taken in the wake of the EU and Group of Seven countries introducing a price cap of $60 per barrel for Russian oil, seeking to restrict the money Russia can earn from oil amid the 10-month-old war in Ukraine.

The price cap applies to oil supplies by sea and does not affect supplies via pipelines. Hungary, Bulgaria, Slovakia, the Czech Republic, and Croatia are temporarily exempted from the need to introduce the price limit.