Putin Bans Oil Sales to Nations Imposing a Price Cap

by Stephen Lendman

On Dec. 27 by executive order, Vladimir Putin banned sales of Russian oil and petroleum products to nations imposing a price cap in defiance of market principles and the rule of law.

His order is effective from Feb. 1 until July 1 — at which time it'll likely remain in place against these, largely Western, nations if their capping policy remains in place, what's highly likely.

At the same time, Putin's decree lets him wave the ban for certain nations at his discretion.

His order applies new and existing contracts.

It came in response to a $60 per barrel cap imposed on Russian seaborne oil exports by EU, G7 and Australian regimes on Dec. 5.

It bans Western companies from providing insurance and other services for Russian seaborne oil exports above the artificially capped price.

Why did Putin wait weeks to act?

Why didn't he retaliate straightaway?

Why is he trading at all with mortal enemies of Russian sovereignty?

Why didn't he ban all Russian exports to their regimes?

Why hasn't he severed relations with ones hellbent for Russia's destruction, dissolution, theft of its resources and exploitation of its people?

Why hasn't he written off the empire of lies and its subservient vassals as too decadent and depraved for normal relations with zero chance of things going another way ahead?

US/NATO regimes are at war on Russia.

Trading with them is strategically counterproductive.

Days earlier, Russia's Energy Minister, Alexander Novak, said European nations will be hard-pressed to find alternatives to Russian oil, adding:

"Let us wait and see which decisions they will make in the long run."

"Probably, they will resort to exemptions, like it was with oil when restrictions did not apply to pipeline supplies."

"Even Germany and Poland that declared their refusal from Russian oil applied for it for 2023."

The embargo doesn't apply to supplies via the Druzhba oil pipeline to Hungary, Slovakia, and the Czech Republic. 

On Wednesday, Kremlin spokesman, Dmitry Peskov, said the following:

Putin's decree reflects "the sovereign right of Russia to respond to such illegitimate, absolutely absurd measures, the so-called price ceiling."

Russia "is constantly in touch with OPEC+ countries on this topic and other topics related to energy market."

Separately according to Russia's Finance Minister, Anton Siluanov, Russia's budget deficit might exceed 2% of GDP because of lower oil revenue.

Yet with China's economy expected to grow next year and possible cuts in Russian oil production, the price of crude has been rising.

And according to the International Energy Agency (IEA):

"Competition for non-Russian diesel barrels will be fierce, with EU countries having to bid cargoes from the US, Middle East and India away from their traditional buyers."

Russia is a major global energy producer and exporter.

It's one of the three top oil producers, along with Saudi Arabia and the US.

With the world's largest gas reserves, it's the second largest exporter of this commodity after the US.

Nations reliant on Russian oil and gas will be hard-pressed to operate without it.

It's at a time of growing hard times throughout the West and soaring inflation.

Corporate layoffs are increasing and a housing crisis of declining home sales as been ongoing throughout most of 2022.

Years earlier, economist Paul Kasriel explained that most banks rely heavily on mortgage-related earnings.

If the US housing market crashes, they'll sustain significant financial damage.

So will the overall economy.

On Tuesday, Morgan Stanley warned that housing affordability is deteriorating faster than ever in its data history.

It's happening while home prices and mortgage interest rates are rising, what's highly unusual.

Year-over-year, the average 30-year mortgage rate doubled to 6.3%.

It's cooling demand and softening the economy overall — at a time when the Fed admitted that job creation is overstated by over one million and US/NATO war on Russia risks escalating to nuclear confrontation.

Year 2023 may combine financial crisis and global war, putting humanity's survival at greater risk than ever before.