Live blog: Russia rejects $60-a-barrel cap on its oil, warns of cutoffs

Saturday, December 3, 2022

Russian authorities have rejected a price cap on the country's oil set by Ukraine’s Western supporters and threatened to stop supplying the nations that endorsed it. 

Australia, Britain, Canada, Japan, the United States and the 27-nation European Union agreed on Friday to cap what they would pay for Russian oil at $60-per-barrel. The limit is set to take effect on Monday, along with an EU embargo on Russian oil shipped by sea.

Kremlin spokesman Dmitry Peskov said Russia needed to analyse the situation before deciding on a specific response but that it would not accept the price ceiling. 

Russia's permanent representative to international organizations in Vienna, Mikhail Ulyanov, warned that the cap's European backers would come to rue their decision.

Kremlin: Putin will visit Donbass 'in due time'

Russian President Vladimir Putin will "in due time" visit east Ukraine's Russian occupied Donbass region, the Kremlin has told Russian news agencies. 

"In due time this will happen, of course. This is a region of the Russian Federation," Kremlin spokesman Dmitry Peskov said, without indicating when this could happen.

Russia: Price cap dangerous, will not curb demand for oil

Russia has said it would continue to find buyers for its oil, despite what it said was a "dangerous" attempt by Western governments to introduce a price cap on its oil exports.

In comments published on Telegram, Russia's embassy in the United States criticised what it said was the "reshaping" of free market principles and reiterated that its oil would continue to be in demand despite the measures.

"Steps like these will inevitably result in increasing uncertainty and imposing higher costs for raw materials' consumers," it said.

Russian President Vladimir Putin and high-ranking Kremlin officials have repeatedly said that they will not supply oil to countries that implement the price cap.

Ukraine: Oil price cap will destroy Russia's economy

Ukraine's presidency said a $60 price cap on Russian oil agreed by the EU, G7 and Australia "will destroy" Russia's economy.

"We always achieve our goal and Russia's economy will be destroyed, and it will pay and be responsible for all its crimes," Ukraine's presidential chief of staff Andriy Yermak said on Telegram. 

But a cap of "$30 would have destroyed it more quickly", he added.

Kherson officials ease river crossings from Russian-held territory

Officials in the southern Ukrainian region of Kherson announced that they would help citizens evacuate from parts of Russian-occupied territory on the east bank of the Dnipro River amid fears of intensified fighting.

Yaroslav Yanushevych, the regional governor, said officials were temporarily lifting a ban on crossings to allow Ukrainians living in villages across the river to traverse the Dnipro during daylight hours and to a designated point.

"Evacuation is necessary due to the possible intensification of hostilities in this area," he wrote on the Telegram messaging app, adding that the ban on river crossings would be lifted through Monday.

Russia likely planning to encircle Donetsk Oblast town of Bakhmut, Britain says

Russia is likely planning to encircle the Donetsk Oblast town of Bakhmut with tactical advances to the north and south, Britain's defence ministry said.

The capture of the town would have limited operational value but it can potentially allow Russia to threaten Kramatorsk and Sloviansk, the ministry added in a daily intelligence update.

"There is a realistic possibility that Bakhmut's capture has become primarily a symbolic, political objective for Russia," the ministry said in the update posted on Twitter.

Western powers agree to impose price cap on Russian crude

The Group of Seven nations (G7) and Australia have agreed to adopt a $60-per-barrel price cap on Russian oil, acting shortly after the European Union reached unanimous agreement on the same price earlier in the day. 

The move is a key step as Western sanctions aim to reorder the global oil market to prevent price spikes and starve Putin of funding for his war in Ukraine.

In a joint statement, the nations said the price cap per barrel of seaborne Russian-origin crude would come into force on December 5 or "very soon thereafter."

They said the G7 was delivering on its vow "to prevent Russia from profiting from its war of aggression against Ukraine, to support stability in global energy markets and to minimise negative economic spillovers of Russia's war of aggression."

For live updates from Friday (December 2), click here