HomeMediaLatest NewsIntroduction of an oil price ceiling will finally split the world

Introduction of an oil price ceiling will finally split the world

12 July 2022

Titov Alexander V. Head of the Global Oil Market Sector, Energy Department

Alexander Titov, Head of the Global Oil Market Sector at the Institute for Energy and Finance, commented on the prospects for introducing a ceiling on prices for Russian oil to the Expert electronic publication.

Alexander Titov told, that the G7 countries continue to look for opportunities to reduce Russian budget revenues from the export of oil and petroleum products as early as 2022, since the EU embargo will only come into effect in the 1st quarter of 2023.

“In the second half of 2022, the volume of oil exports from Russia will not be significantly affected, since so far the “rules of the game” in the oil market are relatively clearly defined. And in the context of high oil prices, Russian budget revenues will remain relatively high, even despite discounts to world prices provided by Russian companies. Therefore, it is important for the G7 countries to maintain the "toxicity" and uncertainty of possible sanctions against Russian oil, which will deter counterparties from expanding cooperation with Russian companies. Accordingly, statements about plans to increase sanctions pressure will be heard constantly,” he said.

Alexander Titov believes that, in fact, the possibility of an increase in the oil price to $140 per barrel is rather concentrated in the 1st quarter of 2023, when the “transition period” of the 6th package of EU sanctions ends.

The expert believes that setting a "price ceiling" for Russian oil and oil products is not an easy procedure that requires the consensus of the majority of buyers, including those who are not members of the G7.

 

Titov Alexander V. Head of the Global Oil Market Sector, Energy Department
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