A price cap on Russian crude oil agreed by the Group of Seven nations and Australia took effect Monday in the latest effort to squeeze Moscow's key source of revenue for its ongoing war in Ukraine.

The price cap was set at $60 per barrel by the G-7 members -- Britain, Canada, France, Germany, Italy, Japan and the United States, plus the European Union -- and Australia as they seek to punish Russia while not triggering major supply disruptions. But Moscow could retaliate by reducing supplies, possibly destabilizing markets.

In a television interview ahead of the implementation, Russian Deputy Prime Minister Alexander Novak said his country views the oil cap as "non-market" and is "considering mechanisms to ban the application of the price cap instrument," according to Interfax news agency.

"We will sell oil and petroleum products to those countries that will work with us on market terms, even if we have to cut production slightly," Novak was quoted as saying.

Under the price cap, the members of the so-called Price Cap Coalition will not provide insurance, finance and other services for seaborne Russian crude oil unless purchasers buy the oil at or below $60 per barrel.

"We think the measure will be effective in lowering the price of Russian crude oil for other countries and lead to limiting Russia's revenue," Japanese Chief Cabinet Secretary Hirokazu Matsuno said at a press conference in Tokyo.

Companies based in the G-7 control around 90 percent of the market for relevant maritime insurance products, according to the U.S. Treasury Department, making it difficult for importers to access such services if they pay a price for Russian oil that is above the threshold.

Under the Treasury's guidance, oil from Russia's Sakhalin 2 energy project bound for Japan will be excluded from the price cap through Sept. 30.

From Feb. 5, seaborne Russian petroleum products will also face a price cap, to be announced later.

According to the Japanese government, while the price cap became effective Monday, oil loaded on vessels prior to the date and unloaded before Jan. 19 at Japanese ports will be excluded.

Japan also requires entities wishing to import crude originating in Russia below the price cap value to obtain approval from the country's industry minister.

The idea of exploring Russian oil price limits was initially agreed upon in June by the leaders of the G-7.

The G-7 members have strongly condemned Russia's invasion of Ukraine, which began in February, and have pledged to ban or phase out Russian oil imports despite the pain it may cause to resource-thirsty nations in Europe and Japan.

Higher energy prices have benefited Russian President Vladimir Putin, while poorer nations around the world continue to bear the brunt of high energy and food prices that have been exacerbated by the war.

The United States has said the price cap system would not only restrict Putin's primary source of revenue for the war but will also encourage the flow of discounted Russian oil into global markets.

The Price Cap Coalition members said in their joint statement released Friday that they are committed to "closely monitoring the effectiveness" of the cap and "will be prepared to review and adjust the maximum price as appropriate."

An EU source has said the price will be reviewed every two months, with an adjustment mechanism in place to keep the price cap at least 5 percent below the market level.

Related coverage:

U.S. excludes oil for Japan from Russia's Sakhalin-2 from price cap

G-7, NATO affirm cooperation as missile hits Poland amid Russia war

G-7 foreign ministers vow to keep imposing "economic costs" on Russia