Russia will stop oil supplies to countries that will limit its cost
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Russia will not supply oil and oil products to those countries that will impose a price limit on these products, since they will use non-market mechanisms, said Russian Deputy Prime Minister Alexander Novak, transmits RIA Novosti agency.
“It’s just that for such companies or countries that will impose restrictions, we will not supply oil and oil products, since we will not work on non-market conditions,” he said.
According to him, the idea of limiting the price of Russian oil is “completely absurd,” its implementation could destabilize the entire industry, causing oil prices to rise, and EU and US consumers will suffer from this.
Earlier, The Wall Street Journal reported that the finance ministers of the G7 countries are planning to hold an online meeting on Friday, where they can agree on a plan to limit prices for oil and oil products from Russia.
This plan provides for a ban on financing and insurance of Russian oil supplies if they are carried out at a price higher than agreed by the G7 member countries. Now officials want to keep supplies from Russia, but significantly reduce its oil revenues.
The talks of the G7 countries on limiting prices for Russian oil became known in July. As Bloomberg wrote then, Western countries are discussing a range from $40 to $60 per barrel, which will be higher than the cost of oil production, i.e. Russia will have an incentive to continue it. At the same time, the administration of US President Joe Biden considers the $40 limit too low and could lead to another jump in oil prices due to a reduction in Russian supplies. As Reuters noted at the end of July, the G7 plans to launch a new mechanism by early December, when the EU embargo on Russian oil supplies by sea comes into force.
Then Novak also noted that the decision to limit prices for Russian oil would cause an imbalance in the market and an increase in quotations. Analysts at the American bank JPMorgan Chase & Co reported that oil could rise in price to $380 per barrel if US and European sanctions force Russia to strike back at its production.
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