Home » Business » Europe, America and Australia set price limit of $60 a barrel for Russian oil Experts: It’s hard to be effective and the current price is much lower than this | Blog posts
Europe, America and Australia set price limit of $60 a barrel for Russian oil Experts: It’s hard to be effective and the current price is much lower than this | Blog posts
The EU has agreed to limit the price of Russian oil imported by sea to $60 a barrel. The Group of Seven industrial countries (G7) and Australia have announced that they will set a maximum price for Russian oil in line with the agreement just launched by the European Union.
The Wall Street Journal believes that the West wants to use the EU’s “power” in the insurance machinery and shipping industry to set a price cap for Rosneft. According to the mechanism, companies transporting Russian oil outside Europe must set the price of petroleum products below $60 a barrel, otherwise they will not be able to obtain the relevant insurance and brokerage services. According to reports, EU and UK companies provide financial, insurance and brokerage services for around 90% of the world’s ships.
US Treasury Undersecretary Adeyemo said on Thursday that the US supports a revision of the price cap every two months. As Poland is dissatisfied with the too high price cap, the European Commission presented a new document on Thursday to enlist Poland’s support. The document promises that starting next January, the price ceiling will be reviewed every two months and the price ceiling will be kept at least 5% lower than the export price of Russian crude oil.
US Treasury Secretary Yellen. AP images.
US Treasury Secretary Janet Yellen said Russia’s economy has shrunk and its budget has become increasingly tight. The price of oil will immediately cut Putin’s most important source of income. Reuters quoted a senior US Treasury Department official as saying the price cap would force Russia to sell oil at a discount and institutionalize it, cutting oil revenues and the Putin regime’s ability to finance war in Ukraine .
However, all sides are not optimistic about the move to limit the price of Russian oil in Europe, America and Australia.
Argus Media, a commodity market price assessment agency, said the measures were unlikely to be effective: For example, the price of Russian Ural crude exported from the Baltic port of Primorsk on Wednesday was $48 a barrel, far below the maximum price set by the West.
Shen En, an analyst at research firm Asoects, also believes that no matter how the price cap is designed, Russia will find buyers outside the EU. Most Asian buyers buying Russian oil did not participate in the EU-imposed Russian oil price cap Participants in the oil market can also provide insurance or financial services to Rosneft.
“Reuters” quoted unnamed US officials as saying there are drawbacks to setting fixed prices: For example, both the periodic review and price review procedures inevitably involve more bureaucratic meetings.
Russian President Vladimir Putin. AP images.
It is worth noting that already in September, Russian Deputy Prime Minister Novakto, who is responsible for energy management, criticized the absolute absurdity of the behavior on price limits of the West, which not only leads to instability of the oil market and shortage supply, but also has the opportunity to lead to a decline in investment in the oil industry as a whole, leading to a global energy security disaster. He stressed that Russia will not supply oil and petroleum products to countries that support price ceilings.
On October 12, Russian President Vladimir Putin attended the “Russian Energy Week” forum and reiterated that measures such as capping energy prices against Russia are “cunning tricks” and “shameless blackmail”. Russia will not go against common sense, let alone supply energy to countries that limit prices.
Putin described an artificial price cap that would trigger global energy shortages and price hikes that would hit the poorest countries first. At present, modern energy is facing unprecedented challenges due to the wrong actions of some Western countries over the years, and various professional and non-political forums should discuss this matter and find solutions.
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