FT: The EU wants to lower the cap on Russian oil prices even further

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to Business FM on the risks to Russian oil exports from possible new EU sanctions and lowering the ceiling on oil prices to $45/bbl:

— There are strong suspicions, at least among European officials, that part of the export of petroleum products from India was originally based on Russian oil, possibly from some other countries. In fact, Russian oil is currently being supplied to three countries — China, India and Turkey, and if anything is coming to Europe, it is mainly from India. It is quite difficult to administer these supplies, because you still need to prove the origin of the oil, and this is not so easy. And this is a potentially conflicting situation from the point of view of interaction between officials of India and the European Union. There has been talk about this for a long time, and such suspicions have also been in the air for a long time, but it is still unclear how to implement it in reality.

If you know which plant in India produces the gasoline you purchased or another petroleum product, and you know that this plant consumes mainly Russian oil, then it is not difficult to make a causal relationship. But it is far from always known which factory these supplies are from: it can be a "portfolio" import, that is, products can come from different factories and from different sources, and the supplier is not required to disclose the entire chain.

— We are not talking about such large volumes, so you can find a replacement. These are all purely political games: there is no real economic background to this. India will redirect these supplies to other markets, and a simple substitution will take place — there is no great difficulty for either India or the EU.