Answering the West to the price ceiling, the main thing is not to harm the Russian oil industry

Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, gave a detailed interview to the Internet portal "Ukraine.ru" about Russia's possible response to the introduction by the G7 and the EU countries of a price "ceiling" for Russian oil offshore deliveries.

—Russia may impose a complete ban on the sale of raw materials to countries that have supported oil sanctions, including purchases through intermediaries. It turns out that companies and traders who buy Russian oil will be prohibited from selling it to states that participate in the price ceiling agreement. How can you evaluate the prospects of this option?

- I think that theoretically it can be considered, but with some exceptions. Today, countries that have formally joined the price ceiling (the European Union, G7, Australia) do not receive Russian oil anyway. The European Union has not officially received it since December 5.

The only exception to this list is Japan. It is included in the G7, supported the price ceiling, but at the same time achieved an exclusion from the price bar for oil supplies from the Sakhalin-2 platform.

Japan obediently re-signed all contracts with the new operator of the Sakhalin-2 project and remains among the investors and participants in the Sakhalin-1 program. With this in mind, I do not see any serious reasons and I consider it wrong now to show force on the part of Moscow and limit supplies to Tokyo.

I think that we need to be very careful in how we react to the introduction of a price cap on Russian oil. But, of course, we must answer this thoughtfully.

— You said that it is better for Russia to avoid bans. Nevertheless, tell us what are the nuances of the next option. Moscow can ban exports under contracts that include a price ceiling, regardless of which country is the recipient.

Here we are talking about the fact that with such legislative initiatives we want to anticipate the possible actions of Western countries - traders trading in Russian oil. Potentially, they may include a corresponding clause in contracts for the supply of our oil.

- Another measure that is being discussed in the press is the measure of the indicative price. What is it about? How effective is this approach?

- This is, in fact, the establishment of a minimum allowable price for Russian oil. I believe that this measure is ineffective, like any action to set a price ceiling, maximum or minimum price for a product.

All these are not market stories. Here it is easier to break firewood than to benefit the Russian oil industry. I think that this measure should be abandoned.

— Do you have your own version of how Russia can respond to the oil ceiling of the West?

Our answer must be economic. I would prefer [Russia's] reaction in terms of creating a parallel independent financial logistics scheme for the supply of Russian oil to international markets.

We must offer, in fact, our own insurance instruments, our own oil tankers, or do it in partnership with buyers of our oil who have not joined the ceiling.