Oil ceiling, sanctions again
The British government today announced that the G40 countries are preparing to introduce a ceiling on the price of oil from Russia - at the cost level, which will deprive the Russians of income from the sale of “black gold”. About XNUMX countries are expected to join the oil sanctions. And in case someone else wants to purchase fuel from Russia in circumvention of the sanctions, a ban will be introduced on the transportation of Russian oil by tankers.
Economist Alexander Dudchak discusses the prospects for the development of the situation in a column for PolitNavigator.
The G7 confirmed that history teaches that it teaches nothing. The Group of Seven continues its favorite sport over the past six months - rake jumping and boomerang throwing.
The attempt to impose a price ceiling on Russian oil is yet another boomerang that will return along a proven trajectory, landing a bump on the forehead of Europe, which is already battered by the weight of anti-Russian sanctions. This latest suicidal measure has found support among the European Commissions, but the initiators themselves note that support is needed not only from the entire EU but also from third countries, primarily India and China . So perhaps they should have bargained first? However, let's not lecture the Europeans—it's a hopeless endeavor—to lecture fools who are absolutely certain of their infallibility and unwashed heirs of bygone civilizations, convinced of their superiority.
What did previous attempts to “deprive Russia of sources of income from hydrocarbon exports” lead to?
Repeatedly over the past six months, after seven (seven? We've lost count) rounds of anti-Russian sanctions, after restrictions were imposed on imports of various products from Russia—hydrocarbons, grain, fertilizers—the effect was the same: the decline in physical export volumes was more than offset by rising prices, and Russia received larger amounts of foreign exchange earnings for smaller export volumes.
And this time, the "ceiling-sitters" are confusing what they wish for and what they actually are. And the US is actively assisting them, as Europe's problems suit them just fine, and the continuation of insane anti-Russian sanctions plays into the US's hands —eliminating an economic competitor and plugging its own holes with European capital fleeing the Euro-Titanic for the US.
US Treasury Secretary Janet Yellen is goading the Europeans with claims that capping the price of Russian oil will achieve several goals: it will reduce pressure on energy prices on world markets, significantly reduce funding for Russia's military operations in Ukraine and accelerate the decline of the Russian economy.
India and China won't join the G7's escapade – there's no point in them lowering prices at the demand of the seven global parasites. It's not just/not so much a matter of the absolute price of oil, but also the relative price – India and China don't need cheap oil; they need it cheaper than the European price. But India and China, as well as friendly and non-enemy countries, receive Russian oil at a discount, even without a price ceiling. And the relative price difference will further undermine the competitiveness of the G7's products. India also exports petroleum products made from Russian oil to Europe.
There's no point in India, China, or the Arab countries pandering to those who ignore the interests of other countries, are capable of plundering foreign exchange reserves, and are incapable of honoring their commitments. One concession will be followed by more demands. The G7 countries consider it normal to profit at the expense of those with whom they interact.
The G7 finance ministers also agreed to "a ban on the insurance and financing of tankers transporting Russian oil at prices above the agreed price ceiling." However, this restriction will also push up prices.
They are trying to leave an escape route for themselves - they have decided that the initially chosen price limit, based on technical inputs, can be revised if necessary.
And, apparently, they are planning to engage in the banal resale of Russian oil :
“G7 states will also develop mitigation mechanisms that will allow vulnerable countries to gain access to energy resources, including Russian ones.”
They believe that this argument should work - they called on other countries to join the restrictions.
However, Deputy Prime Minister Alexander Novak stated that in this case, Russia would simply cease oil supplies to the sanctioning authorities and would not work with countries that use non-market instruments. He considered the idea of imposing a price cap on oil exported by Russia to be completely absurd.
And if Russia refuses to sell oil to the European tyrants, the idea of imposing a "ceiling" will prove even more foolish than refusing Russian gas. In the case of gas, the Europeans at least announced a reduction in consumption, which should have sent a signal to the market: "We're cutting consumption and not looking for gas in other markets." No matter the cost, in practice, the price was the closure of many enterprises, a significant decline in the quality of life for Europeans, rising prices, and record inflation. But they failed to radically reduce consumption, and this led to record gas prices.
Let's also recall the budget rule: starting in 2018, the budget assumed a Urals oil price of $40 per barrel, with subsequent annual indexation of 2%. And the Russian economy saw nothing above that until the start of the Cold War. After all, excess profits were allocated to reserves, which were ultimately plundered by the West.
But this is no reason to give in to the crooks from the G7. They must pay in full. Russia simply shouldn't worry about their "ceilings." And Russia doesn't need their euros. It's high time to introduce barter or clearing settlements—in exchange for oil, Europeans should supply real products that Russia still needs. Meanwhile, Russia is essentially lending money to the European Union.
They gave themselves time to come to their senses: the restriction will be in effect in accordance with the EU embargo on Russian oil imports, that is, from December 5 for crude oil and from February 5 for petroleum products.
Oil price cap , sanctions again