On February 1, 2023, Putin’s decree banning the export of oil under the price ceiling entered into force in Russia.

Against the background of the EU embargo and price restrictions on Russian oil introduced by the G7 countries, oil production in Russia may decrease in 2023.

As Reuters reports, with reference to the statement of the vice-prime minister of the aggressor country Oleksandr Novak, production will drop by 500 thousand barrels already in March.

“Yes, there are such risks… we will evaluate them in the near future,” said Novak, answering questions about a possible decrease in oil production this year.

“To date, we fully realize the entire volume of produced oil, however, as previously stated, we will not sell oil to those who directly or indirectly adhere to the principles of the “price ceiling”. In this regard, in March, Russia will voluntarily reduce production by 500,000 barrels per day,” he said.

The war in Ukraine and the oil situation

At the end of May 2022, EU leaders agreed to introduce a ban on the export of Russian oil.

On December 3, 2022, the Council of the EU decided to set the ceiling price for oil exported from Russia at USD 60 per barrel.

On December 5, 2022, EU oil sanctions against Russia entered into force.

The price ceiling means that from December 5, 27 European Union countries, the United Kingdom, the United States, Canada, Japan and Australia provide services related to Russian tanker oil only if it is purchased at or below a set ceiling price. Raw materials more expensive than 60 dollars per barrel are prohibited to be transported and insured. This is only about transportation by sea, the ban does not apply to pipeline oil.

From February 5, 2023, the purchase of Russian oil products is also prohibited.

On February 1, 2023, Putin’s decree banning oil exports under the price ceiling entered into force.