HomeMediaLatest NewsThe EU Council agreed on the eighth package of sanctions against Russia

The EU Council agreed on the eighth package of sanctions against Russia

05 October 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, gave a commentary to the Business FM radio station about the prospects for introducing a “price ceiling” for Russian oil and oil products and the roles of Hungary and the EU in the process of agreeing it:

“It seems to me that Hungary takes credit for itself where there is none. The same price ceiling initially applied only to maritime transportation of Russian oil and oil products, for the reason that the regulatory instrument itself is associated specifically with maritime transportation, that is, freight and insurance of sea cargo. There is still no certainty that the price ceiling itself, even if this decision is made, will be able to work.

Consent is needed not only from the EU countries or the United States, it is necessary to obtain the consent of other importing countries, primarily China and India, exporting countries, mainly Saudi Arabia and other OPEC countries, and the consent of Russia itself, which simply can not supply oil via those prices that it considers not market. It is possible to make such a decision at the EU level, but most likely it means only a ban on sea transportation and insurance of oil cargoes that come from Russia for European companies. The main risk of introducing a price ceiling is that Russia will sharply reduce supplies to the world market, respectively, we should expect a sharp, significant increase in prices. At least for the US, the main idea was not to punish Russia, but to bring down oil prices. If oil prices rise instead of falling, then this is an emergency. Probably, we are talking about a corridor from 40 to 60 dollars per barrel. What happened to the EU is what experts warned about back in the spring: if sanctions are imposed too intensively, then sooner or later their set will be exhausted, in fact, it was exhausted back in the middle of summer".

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