Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to Forbes on the real prospects for introducing a “price ceiling” for Russian oil on the world market.
Such a measure in relation to Russian oil will be effective only if India and China join in setting the price ceiling for Russian oil, Aleksey Gromov notes. “These are the largest alternative importers of Russian oil, which are now buying the main volumes of Russian hydrocarbons, and at a fairly significant discount, with a “sanctions discount,” Gromov says. “The fundamental question is whether these countries will want to join the restriction, because if they abstain, the measure will be ineffective.”
If the mechanisms proposed by the G7 are introduced, Gromov says, they will certainly make life difficult for Russian oil exports. In particular, the ban on insurance and financing of shipping will be affected. But, the expert recalls, even now deliveries to India are carried out on the basis of insurance schemes with the participation of Russian insurance companies - Ingosstrakh, the Russian Reinsurance Company and Indian counterparties.
“It is quite possible that such a scheme can be implemented in relations with Chinese companies,” the analyst notes. - Chinese partners differ from Indian ones in this regard, as they require government guarantees for insurance. But, if Russia is ready to provide state guarantees for oil cargo insurance, I think that China can go for such a scheme. There is already a redistribution of flows between different markets, and this redistribution will be accompanied by corresponding changes in insurance schemes and financing of relevant contracts.”
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