The oil price cap has been lowered: how Washington and Brussels are trying to put pressure on buyers of Russian oil

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to the business publication Profil on the possible impact of lowering the "price cap" on the prospects for Russian oil exports.

How unpleasant can the restrictions become for us? Let's start with the price cap. Unlike the "cap" introduced in the fall of 2022, the United States, Canada, Japan and a number of other countries have not joined it. Nevertheless, this demarche "will reduce the presence of European carriers in the freight market for transporting oil from Russia," Alexey Gromov said.

With more and more tankers on the sanctions list, it is becoming difficult to find new vessels to transport Russian oil.

"Most likely, this will lead to an increase in the cost of freight," Alexey Gromov sums up. – There will be fewer available vessels, therefore, shipowners will be able to demand a higher risk fee. These are the obvious consequences that are visible today."

The situation with the ban on the sale of petroleum products made from Russian oil also looks ambiguous. The restriction will primarily affect Indian refineries: their ability to export relatively cheap petroleum products may decrease significantly."

"I think Indian companies focused on exporting petroleum products to Europe will formally begin to distance themselves from Russian raw materials in every possible way," Alexey Gromov discusses possible prospects. "This does not mean abandoning it (although some will), rather, schemes will be devised in which it will become extremely difficult or impossible to trace the origin of the oil."