Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Forbes business publication on the key parameters of the price "ceiling" mechanism for Russian oil.
So far, only the first contours of the oil ceiling as a sanctions instrument have been developed, and so far no one, including the developers themselves, fully understands how it will work, Alexey Gromov says.
If the mechanism proves to be effective, oil consumers will be a potential long-term beneficiary, Alexey Gromov believes.
“After a certain period of time, countries will be consulted on the level revision, - he says. There are tools for adjusting the price ceiling depending on its effectiveness or, conversely, the ineffectiveness of its provisions.”
Russia in terms of oil exports in the coming months may suffer significant losses, Gromov believes.
“The overall supply situation is beneficial to consumers in the long run, because it establishes a mechanism for influencing prices that is beneficial to the consumer - a completely new pricing mechanism that can be applied not only to Russia, but also to any other oil exporting countries, for example , to the same Saudi Arabia, ”Gromov notes.
“Obviously, Russia will not be able to completely reformat supply logistics, insurance issues and completely replace European markets with alternative ones in the near future,” the analyst says. - In the next six months, we will expect a certain drawdown in Russian oil exports in the amount of about 500,000-700,000 barrels per day. During this period, incomes will also decrease. When entering into agreements with countries that have not joined the price cap, Russia will have to sell oil at a discount, below the price cap. The costs of logistics and insurance services for Russian oil cargo will increase. The effect will begin to be felt from January, because in December the contracts for the supply of Russian oil have already been formed, and they will be carried out, because the EU made an important exception, allowing these contracts to be executed after the embargo and ceiling were introduced”.
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