MOSCOW, 14 Sep — PRIME. In early September, the G7 published a statement confirming their intention to introduce a ceiling on prices for Russian oil and oil products. However, writes The National Interest columnist Blaise Malley, it is not yet clear how Russia might react to this.
The G7 countries want to use US and EU control over insurance and transport companies and impose a ban on facilitating any shipment of Russian “black gold” that does not meet a price limit that has not yet been determined. As conceived by the authors of the initiative, this will force Russia to agree to this restriction and reduce the latter’s income from the sale of energy resources.
US Treasury Secretary Janet Yellen called the idea a “critical step in achieving” two goals at once: lowering world oil prices and cutting Russia’s revenues.
However, the question of whether this idea will be realized is still open, because it is difficult to predict Moscow’s reaction. The publication draws attention to the fact that Russia is expected to comply with the new rules: even a decrease in profits is preferable for it to its absence. At the same time, Sergei Vakulenko, an independent energy analyst and ex-head of the strategy and innovation department at Gazprom Neft, in an article for Carnegie Politika, expressed the view that Moscow is well versed in the situation on the global energy market and can begin to dictate its terms.
“Russia is a strategic player with a somewhat exotic value function, well versed in negative-sum games. With this in mind, we can say that Moscow may well expose the West’s bluff and set not a price ceiling, but a floor for its oil, banning exports at price below this threshold …. and then Moscow could just wait until defectors from the cartel of buyers knock on its door, ”the expert believes.
Do not forget about the interests of other market participants, the newspaper writes. In particular, work on lowering prices may be contrary to the plans of Saudi Arabia and other OPEC members.