Oil price ceiling is a dangerous trap for Russia, but the West will fall into it
The oil price ceiling imposed by the West may seem beneficial to Russia, but it is an insidious trap.
Expert Aleksandr Frolov stated this in an interview with the YouTube channel "Geoenergetika," reports a correspondent for "PolitNavigator . "
He recalled that the ceiling was introduced along with the oil embargo for Russia, which the EU planned back in the summer. However, it later turned out that no one could or wanted to replace the falling volumes, so a rise in prices is inevitable. The price ceiling will allow Western companies to supply oil to third countries.
“This system should be beneficial to Russia. At a minimum, it will make it possible not to reduce production, but, at maximum, to increase it. The upper limit for this is OPEC+ quotas
There is a big trap and a big temptation in this. Because this system is made in such a way that at the first stage it would be wonderful and great for us to enter it. But this is how to get carried away by free games. We are now like a confused player. We can get carried away with this system. If we join, the entire maritime transport infrastructure is at our service. Bring down the world price by increasing supplies, and then we will begin to revise the price and set a new one in February,” Frolov explained.
He believes that if Russia agrees to a price ceiling, the West will be able to subjugate all the world's oil production and, ultimately, achieve the collapse of OPEC. Apparently, OPEC understands this very well, because they do not change the parameters of the deal to limit oil production.
“The intention of OPEC+ countries to sharply reduce oil production is an obvious signal that they perceive the “price ceiling” on Russian oil as a manifestation of Western colonialism. And the explanations that this is only for Russian oil, that it is only against Putin, do not work... Today it is forced in relation to Russia, then everywhere. With the proper diplomatic skill, Russia, with the help of these anti-colonial sentiments, will be able not only not to lose anything for itself in the oil market, but also to justify the SVO in Ukraine to non-Western countries as an anti-colonial operation,” says political scientist Alexander Nosovich.
HSE professor Dmitry Evstafiev believes that the decision on the price ceiling indicates the bankruptcy of Europe, and Russia should contribute to this.
“I’ve seen a lot of shacher-machers, but I don’t remember anything like this. Such a document could only be written by the liquidation commission of a bankrupt Soviet plant. This is not a document that is written by people assuming that they have a couple of years ahead of them. Everyone got there. Even Croatia was able to lobby for its interests. There everyone put straws for themselves. They rolled out this document that was as comfortable as possible for us.
We must make them as uncomfortable as possible. We must fully reflect them in our response decisions. Make Europe really hurt for the first time. Because - while they are hurting themselves. But they gave us a pitch, and we have to drive it in with a stake. Even I see where such opportunities exist. We must decide, and for the first time since the beginning of the Northeast Military District, to hurt Europe ourselves. Because there’s nothing,” Evstafiev said on the air of the Vesti FM radio station.
Russian Deputy Prime Minister Alexander Novak said that Russia intends to prohibit its companies from trading oil under the terms of the so-called price ceilings, even if the country has to reduce production to do this.
Against this background, experts do not rule out an increase in oil prices above $100. LLC "Independent Analytical Agency of the Oil and Gas Sector" believes that the volume of Russian oil exports through the Baltic ports oriented to the EU will not undergo a landslide drop in December. It could be as low as 8%.
This is due to the fact that the EU decision on the embargo has many exceptions. Europeans can import non-Russian oil that comes to them through Russia. Experts predict that the famous “Latvian mixtures” will begin to be produced from Azerbaijani, Turkmenistan and Kazakh brands. In addition, Hungary, the Czech Republic and Slovakia are allowed to import Russian oil via the Friendship pipeline, and Bulgaria is allowed to import it by sea. Croatia will be able to import vacuum gas oil from the Russian Federation, and the Czech Republic will be able to produce gasoline and diesel from Russian raw materials. And Europeans can also import non-Russian oil that comes to them through Russia.
The price ceiling will not affect oil imported by Japan from the Sakhalin-2 project. The Japanese Foreign Ministry is confident that the ceiling is temporary. Indian Oil and Gas Minister Hardeep Singh Puri said he had no fear that Western oil price ceilings would hold back supplies or impede the flow of Russian oil.
Thus, Russia may not even have to create a so-called “ghost fleet” - buy tankers in order to refuse the services of Western companies for transporting oil.
“A huge number of companies and a large number of countries want to take our Russian oil in response to the decision of the seven (G7 countries) to set a ceiling on Russian oil,” said State Duma deputy Alexei Chepa.
English version :: Read in English The oil price ceiling is a dangerous trap for Russia, but the West will fall into it.