Les Echos: markets grow nervous over Russia’s response to oil price cap
Nervousness is growing in the world markets in connection with the preparation of Russia’s response to the imposed ceiling on oil prices introduced by the West, according to an article of the French newspaper Les Echos.
The newspaper notes that Russia’s willingness to cut oil production has raised concerns, as even a minor production cut could increase tensions in an already very volatile market.
Oil prices have reached their lowest levels in a year in recent weeks, but have “soared” in recent days amid fears of a tightening global supply, as well as increasing demand from China, which is easing its ” anti-Covid” policy.
In addition, another factor that boosted oil prices was the publication of data on a decrease in black gold reserves in the US and the announcement of the start of oil purchases to replenish reserves.
Oil sanctions of the Western countries came into force on December 5: the European Union stopped accepting Russian oil transported by sea, while the G7 countries, Australia and the EU imposed a price cap of $60 a barrel on maritime transport – more expensive oil cannot be transported and insured.
President Vladimir Putin, commenting on the entry into force of the price ceiling, said that the country would not sell oil to countries that would support the restrictions. He also said he would soon issue a decree on countermeasures. Last Friday, Deputy Prime Minister Alexander Novak said that Russia plans to respond to the price ceiling by banning shipments of oil and oil products to countries and legal entities that would require compliance with the condition in contracts, and is ready for a production cut that could amount to 5-7% early next year in connection with this.
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