Russia confirms that it will not export oil and gas to countries that support the Russian oil price ceiling. Kremlin spokesman Dmitry Peskov said. However, Moscow will make a final decision on the exact consequences of this price cap only after analyzing all the details, according to Peskov.
a look. Already in September, Putin warned: “Russia will not supply oil or gas at a higher price.”
It is said that the G7 countries are talking about a maximum price for Russian oil shipped by sea, ranging between 65 and 70 dollars per barrel. The move bans shipping companies in the G7 countries from shipping Russian oil if that oil is sold at a price above the cap. This also applies to companies that provide insurance services for this transportation.
The measure aims to reduce revenue from Russian oil exports as punishment for invading Ukraine. Ambassadors of EU member states are in talks to agree on the exact height of this ceiling. The intended cap is lower than expected in the oil market, so that Russia can still make significant profits from oil exports. Russian oil production costs are well below the ceiling.
The impact is difficult to estimate
We are currently sticking to President Putin’s position that we do not export oil and gas to countries that impose or subsidize price caps. “But now that we’ve looked at these numbers, we need to analyze them before formulating our position,” said Peskov. He states that it is still difficult to estimate the exact impact of the price ceiling on the oil market.
Russian President Vladimir Putin himself warned Thursday of “serious consequences” for energy markets if the price of Russian oil is set. This came during a telephone conversation with the Iraqi Prime Minister, Mohammed Shia Al-Sudani. According to Putin, such actions contradict the principles of commercial relations. “It is very likely to lead to serious consequences for the global energy market.”
At the beginning of September, the Russian president had already warned that Russia would not supply oil or gas to Europe if prices were restricted. This can be seen in the video below.
For natural gas, the European Commission has a Proposal for a price ceiling Or the “market correction mechanism” in detail. But the triumphant atmosphere that prevailed in Belgian circles in September was still not noticed. The price limit is quite high, so the solution may remain a dead letter.
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