Russia has rejected the price cap of $60 per barrel imposed on its oil sales by the United States-led G7 countries, Australia and the European Union. 

The Group of 7 nations had perfected plans to put in place a plan backed by the U.S. to limit how much Russia, the world’s second-largest oil exporter, can charge for its oil exports. 

The plan, which forces Russia to sell its oil at least five per cent less than normal market prices, is aimed at cutting Moscow’s revenue stream while at the same time maintaining global supply to avoid price shock. 

The cap, which was planned to take effect on Monday, is in addition to the EU embargo on marine exports of Russian crude oil, both of which are measures aimed at crippling Russia’s finance of the ongoing war in Ukraine. 

Russia’s Deputy Prime Minster, Alexander Novak, criticised the price cap stating that the country will not sell its oil under the price limitation and will rather lower its production outputs. 

He said the new trade sanctions contradict World Trade Organization rules and would have a negative impact on the global market. 

Mr Novak added that Moscow would put in place mechanisms that would undermine the new sanctions. 

“We will sell oil and oil products only to countries that will work with us on market conditions, even if we would have to lower production,” he said on Rossiya-24, a Russian state news network.

Russia’s curbing of production will send a shock to global oil prices but will also harm the country’s economy.