President Vladimir Putin banned the supply of Russian oil to importers who agreed to apply the price ceiling initiated by Western countries. The response measures will come into effect on 1 February and will be valid until 1 July.
“The supply of Russian oil and petroleum products to foreign legal entities and individuals is prohibited, provided that the contracts for these supplies directly or indirectly provide for the use of a price cap mechanism. The established ban applies at all stages of delivery to the final buyer, ”says the presidential press release. decree.
He has been in the Kremlin many times before. warnedHe said that the Russian Federation would never participate in the destruction of market prices, and any “ceiling” was called unacceptable.
Announcing the signing of the decree, Putin noted that as a result, the price of oil “could go up in a throw”.
At the same time, according to him, Russia will not suffer as a result of limiting the cost of oil and will become for the West “the path to the destruction of world energy” and “the atavism of colonialism.”
How will the decree work?
According to the document, oil exports will be banned directly from February 1, and Russian petroleum products – “from the date set by the government of the Russian Federation, but not earlier than the date of entry into force of this decree.” The government should soon decide on the deadline and adopt the relevant regulations. The President reserves the right to allow any deliveries prohibited by special order.
The implementation of the ban will be monitored by the Ministry of Energy of the Russian Federation. The agency also had to make official statements regarding the implementation of the ban, together with the Ministry of Finance.
Ceiling price
Aspect thinks Deputy Prime Minister Alexander Novak, Russian Federation will be able to produce at least 490-500 million tons of oil in 2023. Despite the restrictions, both oil and petroleum products will be in demand in the market, he is sure of it.
“I do not exclude that there will be risks of reduction in production at certain periods in 2023. Maybe we will reduce it by 7-8% at the peak. However, in general, we will produce at least 490-500 million tons per year. But I repeat, a lot will depend on logistics, ”he said in an interview with TASS.
Novak added that Europe does not understand how it can replace Russian oil products. “Let’s see what decisions they will take in the end,” said the Deputy Prime Minister.
Moscow does not rule out that some EU countries will eventually demand an exception for themselves. Even Berlin and Warsaw, which announced that they would completely abandon oil from the Russian Federation, applied for pumping for 2023.
Vitaly Isakov, investment director of Otkritie Management Company, believes that Russian oil prices may rise in the near future. “Demand for oil will increase. It will be the foundation of world energy for at least a few more decades. At the same time, the volume of oil supply may decrease and insufficient investment in future fuel production may play a role in this process. speaks Is it him?
Other growth factors include the end of oil sales from US strategic reserves and the easing of covid restrictions in China.
Vyacheslav Mishchenko, head of the Center for Strategy and Technology Analysis for the Development of the Fuel and Energy Complex of the Gubkin Russian State University of Oil and Gas, believes that Russia will develop alternative supply routes to countries that do not support restrictions. .
“Alternative routes continue to develop. There are large consumers of hydrocarbons who do not support sanctions. For example, India, China and other Southeast Asian countries. They are priority markets for us,” he said. speaks Mishchenko.
Aspect to think Analysts surveyed by RIAMO, in 2023, the price of oil per barrel will not exceed 110 dollars.
“It is unlikely that Brent oil prices will fall below $75 a barrel and it is unlikely to rise significantly above $110 a barrel,” said FG Finam analyst Andrey Maslov.
Quotations continue to be affected by geopolitics, economic recession in developed countries, energy demand in China and the imposition of marginal oil prices. This means that prices will not fall if demand remains at least at the current level.
Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.