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 one of the key architects of the Western price cap on Russian oil, which aims to drive down Moscows revenues used to fund its invasion of Ukraine.

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

Russias economy has proved remarkably resilient in the face of tough Western sanctions, but the price cap has complicated its efforts to sell oil globally.

Moscow, which accounts for around 10 percent of global oil supplies, said last month that it would cut output by 500,000 barrels per day in March in response 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,” U.S. Energy Envoy Amos Hochstein said on Monday.

(Writing by Caleb Davis; Editing by Gareth Jones)