KYIV, Dec 27 - Russia retaliated on Tuesday against a price cap on its oil imposed by Western countries, while its forces were involved in heavy fighting around the bombed-out ghost town of Bakhmut in eastern Ukraine, Reuters reported.

Despite an intensification in the fighting the frontline in eastern Ukraine remains little changed, with neither side making any major advances, said Britain's Ministry of Defense and Ukraine military analysts.

The price cap, unseen even in the times of the Cold War between the West and the Soviet Union, is aimed at crippling Moscow's military efforts in Ukraine - without upsetting markets by actually blocking Russian supply.

Under the cap, oil traders who want to retain access to Western financing for such crucial aspects of global shipping as insurance must promise not to pay above $60 per barrel for Russian seaborne oil.

That is close to the current price for Russian oil, but far below the prices at which Russia was able to sell it for much of the past year, when windfall energy profits helped Moscow offset the impact of financial sanctions.

The decree from Putin, published on a government portal and the Kremlin website, was presented as a direct response to "actions that are unfriendly and contradictory to international law by the United States and foreign states and international organizations joining them".

The Kremlin ban would halt crude oil sales to countries participating in the price cap from Feb. 1-July 1, 2023. A separate ban on refined oil products such as gasoline and diesel would take effect on a date to be set by the government. Putin would have authority to overrule the measures in special cases.

Russia is the world's second largest oil exporter after Saudi Arabia, and any actual disruption to its sales would have far-reaching consequences for global energy supplies.

On the ground in eastern and southern Ukraine, Russian forces again shelled and bombed towns and cities on Tuesday. After a number of dramatic Ukrainian gains in the autumn, the war has entered a slow, grinding phase as bitter winter weather has set in at the front.

The heaviest fighting has been around the eastern city of Bakhmut, which Russia has been trying for months to storm at huge cost in lives, and further north in the cities of Svatove and Kreminna, where Ukraine is trying to break Russian defensive lines.

In Bakhmut, home to 70,000 people before the war and now in ruins, Reuters reporters saw fires burning in a large residential building, while debris littered the streets and most buildings had had their windows blown out.

Britain's Ministry of Defense said in an update: "Russia continues to initiate frequent small-scale assaults in these areas (of Bakhmut and Svatove), although little territory has changed hands."

Ukrainian military analyst Oleh Zhdanov said in a YouTube video that fighting had intensified with Russia deploying armored vehicles and tanks.

"There has been very little change in terms of the front line, but pressure from the enemy has intensified, both in terms of the numbers of men and the type and quantity of equipment," Zhdanov said.

In Kherson, abandoned by Russian troops last month, Russian forces shelled the maternity wing of a hospital, said Kyrylo Tymoshenko, Ukrainian President Volodymyr Zelenskiy's deputy chief of staff, on Telegram. No one was hurt and the staff and patients had been moved to a shelter, Tymoshenko said. (rt/ez)