Olivia Woods
On Monday, the G7 placed a price cap on Russian seaborne oil as part of an effort by the West to restrict Moscow’s ability to fund its conflict in Ukraine. Russia, however, has indicated it will not comply with the restriction, even if it means cutting production.
The G7, EU, and Australia’s price cap follows the EU’s seaborne ban on Russian oil imports and similar agreements by the US, Canada, Japan, and Britain.
It enables G7 and EU ships, insurance companies, and credit institutions to deliver Russian oil to non-EU nations, but only if the price of the shipment is at or below the price cap.
The cap will make it harder for Moscow to export its oil at a higher price, given that many of the world’s major shipping and insurance corporations are headquartered in G7 countries.
Russia, the world’s second-biggest oil exporter, declared Sunday that it would not support the restriction and will not sell oil that is subject to it, even if doing so would require a reduction in production.
Since Soviet scientists discovered oil and gas in the swamps of Siberia in the years after World War ll, exporting oil and gas to Europe has been a major source of foreign currency income for Russia.
However, the EU and G7 countries believe that Russia will continue to have the incentive to supply oil at that price, despite the price cap being set at $60 per barrel, which is not far below the $67 level where it closed on Friday URL-E.
Russian news agency RIA said on Monday that China’s foreign ministry stated that Beijing will maintain its energy cooperation with Russia on the grounds of respect and mutual benefit after the EU agreed to the price cap.
“This review should take into account… the effectiveness of the measure, its implementation, international adherence and alignment, the potential impact on coalition members and partners, and market developments,” said the European Commission in a statement.
On February 5th, , 2923, a similar measure impacting Russian petroleum products will go into effect, although the level of the cap has not yet been established.
Dmitry Medvedev, a former president of Russia and current member of Putin’s Security Council, warned of an “unimaginable” increase in global oil prices in a Telegram post.
He warned that because of the West’s “unequal battle with the Russian bear and General Frost,” the region will freeze over this winter.
“What is good for a Russian is death for a German,” he said, referring to the upcoming winter. “One thing is clear – nothing good will come of it for consumers, that’s for sure. So let them stock up on schnapps, quilts and water heaters.”
Original source material for this article taken from here
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