On November 30, the Valdai Club hosted an expert discussion, titled “Who Really Stumbles Over the ‘Price Threshold’ for Russian Oil?”
Unilateral restrictive measures being rolled out by the US, the EU and a number of other initiators have led to the excessive politicisation of Russia’s participation in the global oil market. Bans on oil supplies to the United States are already in force, and they will come into force in the EU on December 5, 2022. In addition, the G7 countries are working to introduce a “price cap” mechanism for Russian oil. It involves a ban on the transportation of oil from Russia by sea and the provision of related services if the price of transported oil is above a certain threshold. It is assumed that this threshold will be lower than the world oil price, which will force Russia to sell oil cheaper. However, until now, the EU countries have not been able to agree on a single “threshold” level because of the position of Poland and the Baltic countries. Against this background, Russia is actively looking for new markets and ways to supply oil to buyers that would be protected from the impact of Western sanctions.
To what extent will Russia be able to reorient its supplies to Asian markets? Will Russia be able to maintain its volume of oil exports or increase them in the event of an increase in world demand? How will the sanctions affect world oil prices? Will the “price threshold” limit the Russian supplies? These and other questions were discussed by the participants of the discussion.