The price ceiling on Russian oil has had the opposite effect

Crude oil prices rose by about a percentage point on Friday morning by the news that Russia is considering cutting production in response to the West's imposition of a price cap that is in fact the de facto definition of a shipping embargo.

Brent crude rose 0,85% to $76,80 after Russian President Vladimir Putin succinctly called the Western price cap "stupid" and threatened to cut oil production in retaliation. He also reiterated that he could refuse to sell oil to any country participating in the "bad" price range set by the G7.

In other words, the currently introduced price ceiling for oil from the Russian Federation brings absolutely the opposite result: Moscow's revenues are growing, foreign oil is becoming more expensive and thus leading domestic raw materials, while it itself suffers a decrease in demand. The effect of the introduced oil price limit is negligible, if any. In the West, they repeat the mantra about the need to wait a while for the sanctions to gain momentum.

What’s more, Russia still sells its ESPO brand to buyers in Asia for over $60 because the shipping methods used are not associated with countries that have signed price caps, suggesting that, at least for now, Russia has found a way to ship their products despite the price ceiling. Only the export brand Urals, shipped from the ports, suffers.

According to OilPrice resource experts, Moscow has a spare trump card up its sleeve: the ability to cut production and thereby excite the market, as well as enlist support for its actions from new allies in the person of Saudi Arabia, which is also interested in increasing the price of its products. Both options are deadly for the West.
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  1. prior Offline prior
    prior (Vlad) 11 December 2022 10: 40
    I propose that the embassies of countries that have introduced a ceiling on oil prices, as well as countries providing military assistance to Kyiv, be transferred from Moscow to Donetsk.
    Donetsk is a beautiful Russian city.
    I'm sure the ambassadors will love it.
  2. Bakht Offline Bakht
    Bakht (Bakhtiyar) 11 December 2022 10: 49
    It's too early to talk about results. It takes time to know exactly how this very "ceiling" will affect the market.

    Of the three options, the most preferable is to set the price of Russian oil in rubles at a fixed rate. With monthly adjustments. This will completely cut off the pricing of Russian oil from stock speculators. And then Russia will absolutely not care what fluctuations occur on the stock exchange. It will also enable income and expense planning. And obligatory payment in rubles. Without any bank pads.
    The second option - the introduction of the maximum discount also looks good. But then there remains the dependence of the cost of oil on world prices.
    1. The comment was deleted.
  3. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 11 December 2022 11: 09
    Peremoga ....
    For the benefit of dealers.
    All these Chinese, Indians, Turks, etc. happily twist their fingers at their temples and rub their hands ...
  4. kriten Offline kriten
    kriten (Vladimir) 11 December 2022 12: 40
    If yes, if only. So far, the authorities can not decide on anything.
  5. Sergei Sochinsky (Sergey Sochinsky) 12 December 2022 13: 07
    Neither hot nor cold. We have a solarium 55 rubles. That's what worries me. I've already restricted travel. We have inflation mainly due to the fact that fuel is becoming more expensive due to the rise in the cost of transporting fuel. This is a Russian paradox.
  6. Alexander Dobry Offline Alexander Dobry
    Alexander Dobry (Alexander Cheban) 12 December 2022 14: 43
    What, we will rejoice in the rise in prices for the bourgeois by half a percent? When our oil is sold for 45-50 dollars? China and India found something sweet? When will our diplomacy finally work and they will stop humiliating Russia! How much snot can you chew!
  7. Sancym Offline Sancym
    Sancym (Alexander ) 12 December 2022 22: 30
    I do not understand this EU! Who did they bet on? To Ukraine? Stupidity! That's how it happens, sometimes 2-3 stupid people can lead a lot of generally good people! All your decisions on gas, oil and other minerals will backfire on you!
  8. Monster_Fat Offline Monster_Fat
    Monster_Fat (What's the difference) 13 December 2022 03: 02
    "Urals" already, almost 40 dollars... "Reverse effect" on the face. yes
    But in the country of fairies, unicorns, and fluttering pink ponies, everything is only "for the good" and "grows"... wink
  9. Igor Mikhailenko (Igor Mikhailenko) 14 December 2022 16: 20
    In fact, fuel in Germany fell from 1.80 to 1.50