Jakarta –
Russian President Vladimir Putin banned it oil export to the G7 countries as well as Australia and the European Union. The decision was revenge in the aftermath of policies enacted by G7 countries, including the United States, the European Union, Japan and Australia.
The root of the problem is the import price limit the oil those countries set at US$60 a barrel. This policy went into effect on December 5, 2022. Putin was furious and eventually banned oil exports to G7 countries.
The reason why the G7 countries impose the price cap is to hurt the Russian economy. Of course, in the end, to prevent Russia from using the oil revenues, it continues to attack Ukraine.
Even so, quoting from CNBC, Russian Finance Minister Anton Siluanov on Wednesday (12/28/2022) said the ban oil export signed by Putin will put the Russian economy in difficulty. The huge impact on Russia’s revenues is that it threatens to run into an even deeper deficit.
Russian Deputy Prime Minister Alexander said state revenues would be much higher than the previous forecast of a 2% deficit in 2023. Oil production was also said to decline by 5% to 7%.
“Restrictions on the export price of Russian crude and refined oil could force the Kremlin to cut production by between 5% and 7% next year,” he said.
Economists also predict the same thing, that the Russian economy will experience a decline due to the ban on oil exports to the G7 countries.
“It is too early to fully assess the impact of the G7 oil price caps and the EU ban on imports of Russian crude that took effect on December 5, but early signs suggest that the Russian economy is starting to feel the pressure,” said Nicholas Farr. . , new European economist of Capital Economics.
International benchmark Brent crude fell from a peak of around $98 a barrel in October to around $77 earlier this month, recovering to around $84.50 a barrel early Tuesday in Europe.
For your information, Russia has just issued a ban on its oil companies from exporting oil supplies to the G7 countries, Australia and the European Union. This ban is established in the Decree of the President of Russia.
Quoting the BBC, Putin said in his decision on Wednesday (28/12/2022) that the ban would last for five months from February 1 to July 1, 2023.
The G7 member countries themselves are Canada, France, Germany, Italy, Japan, the United Kingdom and the United States (USA).
Watch a video “Pertamina CEO’s response to question about declining world oil but rising fuel subsidies“
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