Kremlin says it does not recognise Western price cap on its oil

(Reuters) – The Kremlin said on Tuesday that it did not recognise the price cap introduced by Western countries on its oil exports, after the United States said that the cap was “working well”.

Washington was an architect of the Western price cap for Russian oil. It aims at reducing Moscow’s income to finance its invasion in Ukraine.

“We do not and will not recognise any cap. We are working so that this system does not harm our own interests,” Dmitry Peskov, Kremlin spokesperson, told reporters.

Russia’s economy is resilient to Western sanctions. However, the price cap has hampered its ability to export oil internationally.

Moscow is responsible for approximately 10 percent global oil supply. It announced last month that it will reduce its output by 500,000 barrels per hour in March to respond to the price cap.

U.S. officials argue that the price cap is working, as Russia’s Urals blend – a benchmark of Moscow’s exports – sells at a steep discount to international marker Brent.

“I think the beauty of the process is that it is working and that Russian oil and Russian products are being traded below the price cap,” Amos Hochstein was the U.S. Energy Ambassador on Monday.

(Written by Caleb Davis, Editing by Gareth Jones