Presidential decree banning sale of oil and petroleum products by Russian cos at price cap extended until end-2025

MOSCOW. June 10 (Interfax) - Russian President Vladimir Putin has extended the presidential decree on applying special economic measures in the fuel and energy sector in the wake of a price cap for Russian oil and petroleum products set by several foreign states until December 31, 2025, the decree says.

The decree first took effect on February 1, 2023 and has been extended several times since then, most recently until June 30, 2025. It bans the sale of Russian oil and petroleum products to foreign legal entities and individuals if contracts stipulate the terms and conditions of the price cap set by the United States and a number of other countries.

G7 and EU countries have formed a Price Cap Coalition that bans imports of Russian oil and oil products, but allows ship owners from their countries to transport them and provide brokerage and other services if they are sold for not more than a price cap set by the coalition. The purpose of the embargo and price cap for Russian oil and oil products is to limit Russian budget revenues from the sale of energy, while maintaining supply of oil and oil products to the world market.

The Kremlin considers the price cap to be a non-market instrument. Companies themselves and individuals who have concluded supply contracts are obliged not to allow the presence of price cap provisions in contracts and addenda to them. Also, companies must monitor the non-application of this condition right up to the end customer.