Decree on Russian oil companies not applying price cap on oil, petroleum products extended to end of 2027

MOSCOW. June 26 (Interfax) - President Vladimir Putin has extended the decree on the application of special economic measures in the fuel and energy sector in connection with the establishment by certain foreign states of a maximum price for Russian oil and petroleum products, which expired on June 30, 2026, until the end of 2027, according to the published decree.

This decree first entered into force on February 1, 2023, and has been extended several times.

The document prohibits the sale of Russian oil and petroleum products to foreign legal entities and individuals if the contracts contain a price cap condition established by the United States and a number of other countries.

The G7 countries and the EU (the Price Cap Coalition) imposed a ban on the import of Russian oil and petroleum products, but allowed ship-owners from their countries to transport them and provide brokerage and other services if the goods are sold at a price not exceeding the cap established by the coalition. The objective of the embargo and price cap on Russian oil and petroleum products is to limit the revenues of the Russian budget from the sale of energy resources, while maintaining a sufficient supply of oil and petroleum products on the global market.

Russia considers the establishment of the price cap to be a non-market instrument. The companies and individuals themselves that enter into supply contracts are obligated to prevent the inclusion in agreements and amendments to them of provisions on the price cap. They must also ensure monitoring of the non-application of this condition down to the end buyer.