BAKU, Azerbaijan, Dec.6. The Russian oil price cap is not expected to have a material impact on Russian exports or production, Trend reports with reference to Rystad Energy.
“The $60-per-barrel price cap on Russian crude, announced by the European Union (EU) on December 2 following a series of complex negotiations, does not alter Rystad Energy’s Base Case forecast for Russian exports and production of crude oil. We continue to believe that Russia will face a shortage of tankers to maintain crude oil exports from its western ports.
The threat of losing protection and indemnity (P&I) insurance will limit Russia's access to the tanker market, reducing crude exports to 2.4 million barrels per day (bpd) – 500,000 bpd lower than levels seen before Russia invaded Ukraine in late February this year – however, by the summer, Russia will be able to expand its fleet and restore crude export volumes,” reads the latest report from Rystad Energy.
Sam Barden, Director of SBI Markets, an international commodity trading and advisory company, told Trend that the attempt by the EU to impose a Russian oil price cap is futile, misguided and immature.
“There can never be a good outcome when sanctions are involved. These attempted price caps are sanctions and all sanctions do is mispricing the base assets and delivering economic pain and suffering to populations who only want peace. There should be no price cap,” he said.
Barden noted that it will deliver significant pain and suffering to European citizens, who will freeze and starve their way through winter.
“Oil pricing will become in-efficient and become the realm of criminal elements who will launder oil and money through westerns banks and markets. Ultimately, the Europeans will be the ones driving this situation because they will be the ones who will be desperately short of energy to heat and feed their citizens and looking for alternative sources, mispricing and driving up prices for them,” the expert added.
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