HomeMediaLatest NewsOil at $62: Will the EU countries come to an agreement and will Moscow agree?

Oil at $62: Will the EU countries come to an agreement and will Moscow agree?

30 November 2022

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to Business FM on the reasons and significance for Russian oil exports of the possible approval of a “price ceiling” at $62 per barrel:

“For Russian companies, this is a fairly good level, which allows you not to think about whether there is a preference or not, and not to think about it either for suppliers or buyers. This is already priced in the market. Over the past few weeks, the oil market has been in a very calm mood. Everyone suddenly became convinced that Russia would not drastically reduce exports in December-January. That is, there will be some reduction, but relatively small. What will actually happen, we do not know, since everything depends mainly on what Russian companies will decide. The proposal that is now being discussed is not the worst of all that could be. Another thing is that we need to prepare for the fact that next year - most likely already at the beginning of the year - the ceiling will gradually, gradually decrease. It will probably be brought to a certain target level, which, I think, is between $40 and $50 per barrel, which is already critical for Russian suppliers. We must understand that this is a trap that they are trying to lead us into, and we need to jump out of it in time if we still fall into it”.

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