Russian “no” to the decision to cap oil prices

The closest ally in the energy sector to President Vladimir Putin said today that Russia, the second largest oil exporter in the world, will not sell oil subject to a Western price ceiling even if it is forced to cut production.

The Group of Seven and Australia agreed on Friday to a price ceiling for Russian seaborne crude at $60 a barrel, after European Union member states overcame resistance from Poland.

The West’s move is an attempt to punish Putin for the war in Ukraine.

Russian Deputy Prime Minister Alexander Novak said today that the West’s move is blatant interference It contradicts the rules of free trade will destabilization of global energy markets causing a shortage in supply.

said Novak, the Russian government official in charge of the country’s oil, gas, atomic energy and coal. “We will sell oil and its products Only in those countries that will work with us On market terms, even if we have to cut production a little bit.”

Novak said the western roof can cause Disruptions in product markets And it affects countries other than Russia.

It is unclear what, if any, direct impact the western cap will have on Russian oil flows because Brent’s discount on Russian blends has widened significantly.

Urals blend traded around $61.3 a barrel – just over $1 over the ceiling. Brent crude futures closed at $85.57 manufacturing.

Selling oil and gas to Europe is one of the main sources of foreign exchange for Russia after Soviet geologists discovered oil and gas in the swamps of Siberia in the decades after World War II.

A source, who asked not to be named due to the sensitivity of the situation, told Reuters that the measure is intended to ban Russian companies and traders from dealing with countries and companies that are guided by the maximum limit.

In essence, such a procedure Banning the export of oil and petroleum products In the countries and companies that apply.

After ordering the military operation in Ukraine on February 24, Putin said the United States had launched an economic war against Russia with the harshest sanctions in modern history, warning that the West would face an energy crisis.

In September, Putin warned the West that he could not cut off energy supplies if price controls were imposed, saying Europe would “freeze” like a wolf’s tail, as a well-known Russian fairy tale goes.

Russia may get enough tankers to move most of its oil beyond the new G7 price ceiling, industry players and a US official told Reuters in October, highlighting the limits of Moscow’s most ambitious plan yet to cut Moscow’s wartime revenue. .

Source: RES-MPE

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