WASHINGTON, Oct. 1 The price ceiling on Russian oil introduced by the United States and its allies in 2022 should be abolished, since it does not allow reducing Russia’s export revenues hydrocarbons, says Bloomberg First Word oil strategist Julian Lee. He wrote about this in his column published on the Bloomberg website.
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“The time has come to abolish the price ceiling on Russian oil. The restrictions do not harm Russia’s income, but they increase environmental risks,” Lee wrote.
According to the expert, Western restrictive measures have led to an increase in risky operations for transferring oil at sea from one tanker to another, which increases the likelihood environmental disaster in the event of an accident and hydrocarbon spill.
«As global oil prices have risen in recent months, so too has the value of Russian oil. Urals are now closer to $100 a barrel than $60, and most owners of the ships that carry them are willing to ignore the price ceiling.» , Lee points out.
The analyst emphasizes that the effectiveness of the price ceiling initially depended on Russia's need for Western ships and services to continue the movement of oil to international markets and its willingness to export it within the ceiling set by the West.
In addition, shipowners “hardly need proof” from the cargo owner that the oil being transported was purchased taking into account the ceiling, but even if such documents are presented, then “there is no desire or way to verify that what is written in the affidavit is true.»
In September, Venezuelan Foreign Minister Ivan Gil Pinto also said in an interview that the ceiling on the price of oil from the Russian Federation introduced by the West represents irrational actions that violate all principles of international trade, and that Caracas does not agree with “market manipulation, under any circumstances.”
Oil sanctions by Western countries against Russia came into force on December 5, 2022: the European Union stopped accepting Russian oil transported by sea, and the G7 countries, Australia and the EU introduced price restrictions for oil transported by sea at the level $60 per barrel — more expensive oil is prohibited from being transported and insured. In response, Russian President Vladimir Putin by his decree prohibited from February 1 the supply of oil to foreign parties if the contracts directly or indirectly provide for the use of a mechanism for fixing the maximum price.