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It aims to ensure that Russia continues to supply oil to the global market while limiting its capacity to fund the conflict in Ukraine
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The price limit on Russian seaborne oil that the European Union (EU), the G7 and Australia agreed to now comes into effect.
The USD 60 per barrel limitation, which became effective on Monday, aims to ensure that Russia continues to supply the global market while limiting its capacity to fund the conflict in Ukraine.
Moscow, on the other hand, has said that it will not follow the measures, even if it means reducing production.
In addition to the EU's ban on imports of Russian crude oil by sea and similar commitments made by the United States (US), Canada, Japan and the United Kingdom (UK), the cap will also be imposed.
It permits the use of G7 and EU tankers, insurance firms, and financial institutions to transport Russian oil to third-party countries for a price of no more than USD 60 per barrel.
The cap might make it challenging for Moscow to sell its oil for a higher price because the major shipping and insurance companies in the world have their headquarters in G7 nations.
Those nations can continue to purchase Russian oil beyond the price cap without adopting western countries' measures for its acquisition, insurance, or transportation.