At a gathering on the RussiaChina Energy Business Forum sidelines, Russian Deputy Prime Minister Alexander Novak reaffirmed a firm stance on the proposed oil price ceiling. He emphasized that whatever level is chosen, there will be a price tag attached. He warned that even a high ceiling would undermine contractual principles and create widespread friction in energy markets. Novak’s remarks underscored a belief that the ceiling would not merely regulate price but inject risk across the energy sector and beyond.
During his remarks, Novak argued that introducing a price ceiling would prompt a cascade of dangers. He noted that recent measures restricting prices have led to decisions that carry substantial risk for the sector’s functioning. He warned that such limits could trigger shortages in energy resources and dampen investments across the industry. The concerns, he suggested, would extend to any barter commodity Western nations might seek to regulate in the future.
Novak also criticized Western sanctions as being imprudent and impractical from a contracting perspective. He stated that Russia would operate in line with market principles and would not compromise its position. The cabinet member indicated that Moscow would be prepared to suspend oil shipments even if exports appeared financially advantageous under a fixed ceiling, signaling a readiness to defend its interests in the global energy market.
Ceiling price controversy
Previously, G7 finance ministers agreed to pursue a price ceiling on Russian oil, aiming to form a broad international coalition to enforce transport restrictions by sea for oil priced above the cap. The United States framed the move as a means to reduce Moscow’s revenue linked to military operations in Ukraine while potentially easing global energy prices. The plan anticipated entry into force in December for crude and February for refined products as part of an eighth package of antiRussian sanctions.
But consensus has proved elusive within the European Union. The European Commission proposed a ceiling in the $65 to $70 per barrel range, while Poland urged a much lower figure closer to $30, arguing that the suggested maximum would be near current market prices. Several EU members and Baltic states signaled that they would accept a lower ceiling, whereas Greece, Cyprus, and Malta favored higher levels or compensation schemes due to their dependence on tanker routes. The negotiations revealed a widening gap in risk assessment and economic impact among EU partners.
According to Josef Sikel, head of the Czech Ministry of Industry and Trade and chair of the EU Council, talks were set to resume in midDecember. Reports from TASS indicate that Russia has been selling Ural oil at a discount relative to Brent, with discounts around $20 per barrel in certain markets. This pricing dynamic adds another layer to the ongoing debate over the feasibility and consequences of sanctionslinked price controls.
Kremlin’s reaction
Dmitry Peskov, spokesman for President Vladimir Putin, dismissed European proposals as numbers that fail to consider real outcomes. He suggested that policymakers appeared more intent on issuing a decision than on achieving tangible effects, stressing that the ceiling’s implementation would be weighed carefully rather than rushed. He asserted that Moscow would not supply oil and gas to states that join a pricelimit regime until a clear position is established from the Kremlin. Peskov warned that Moscow would continue to assess developments and respond accordingly before forming a formal stance.
The Kremlin’s spokesperson added that the current price debate would undergo thorough analysis, with Moscow monitoring the situation to determine an appropriate approach in light of evolving market conditions and policy signals. The underlying implication from Moscow remains a commitment to market-based operations while defending national energy interests in the face of external pressure. (Source: TASS)