How Russia to give the best response to the West's oil price caps

Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Vzglyad business newspaper about Russia's possible response to the introduction by the G7 and the EU countries of a "price ceiling" on Russian oil marine deliveries.

Alexey Gromov is against setting the maximum level of discount in absolute terms, it is better to do it in percentage terms. “Because it will not be a market approach. In addition, we cannot predict the movement of world oil prices. And the preconditions for a global recession to break out in 2023 are getting stronger. In this situation, Brent prices may drop below $80 per barrel. They are now below $85. Of course, this pulls down the prices for Urals,” the source said.

It is better to set a floating index of the maximum discount level as a percentage of Brent, conditionally 15-20% of the world price, the expert believes. “Such a measure should not be taken only in the Kremlin offices. We need consultations with Russian companies so as not to harm the oil and gas industry,” the IEF Energy Director believes.

The main thing, in his opinion, is that Russia's response should not be counterproductive, so that it does not harm our oil and gas industry and income. Otherwise, we will simply help the West to increase the effect of sanctions, the purpose of which is to cut Russia's income from energy exports.