The Kremlin announced that it will not accept the EU oil price ceiling set to take effect on Monday, along with an EU embargo on Russian oil shipped by sea.
ADVERTISEMENTBoth Moscow and Kyiv have slammed the new price cap on Russian oil set by Western allies.
Russia rejected the $US60 per barrel price cap and warned of a response as Ukrainian President Volodymyr Zelenskyy criticised the deal as "weak" amid a push from Kyiv for a lower cap down to $US30 a barrel.
Zelenskyy said the price cap was an inadequate answer to Russia's invasion of Ukraine.
"You wouldn't call it a serious decision to set such a limit for Russian prices, which is quite comfortable for the budget of a terrorist state," said the Ukrainian President in a video address on Saturday.
Kremlin spokesman Dmitry Peskov said Russia needs to analyze the situation before deciding on a specific response but that it would not accept the price ceiling.
Under Friday's agreements, insurance companies and other firms transporting oil would only be able to deal with Russian crude if the oil is priced at or below the cap.
Most insurers are located in the EU and the United Kingdom and could be required to observe the ceiling.
Russian crude oil has already been selling for around $US60 a barrel, a deep discount from international benchmark Brent, which closed Friday at $US85.42 per barrel.
Although experts say the measures will likely be felt by Russia, the blow will be partially softened by Moscow's biggest crude oil trade partners: India and China - neither of whom has committed to the price cap.
The Russian Embassy in Washington insisted that Russian oil "will continue to be in demand" and criticized the price limit as “reshaping the basic principles of the functioning of free markets.”
A post on the embassy's Telegram channel predicted the per-barrel price cap would lead to “a widespread increase in uncertainty and higher costs for consumers of raw materials.”