Russia says it does not accept the West’s price limit on Russian oil, warning that energy prices may skyrocket.
On December 3, local time, several Russian officials expressed opposition to the decision of Western countries to set a price cap on Russian oil, saying that this decision would lead to a rise in global oil prices.
Russian President’s Press Secretary Peskov said that Russia will not accept the oil price ceiling proposed by the West. The Kremlin is evaluating the current situation. Russia has made some preparations for the EU to set an oil price ceiling.
Abramov, deputy chairman of the Russian Federation Council, the economic policy committee of the upper house of parliament, said that the consequences of setting a price cap for Russian oil are obvious. Such behavior will trigger a surge in oil demand, disruption of supply chains and skyrocketing global fuel prices. In addition, Leonid Slutsky, chairman of the International Affairs Committee of the Russian State Duma, the lower house of parliament, warned that the EU’s price ceiling for crude oil exported to Russia is endangering the EU’s own energy security.
Kirill Melnikov, head of Russia’s Center for Energy Development, said that with the European Union imposing price caps on Russian oil and Russia likely to reduce oil exports in December and January, global oil prices could exceed $100 a barrel.
EU member states reached an agreement on the 2nd, agreeing to set a price ceiling of US$60 per barrel for crude oil exported by sea from Russia. The agreement is subject to formal approval through a written process, details of which are due to be announced on the 4th. The Czech Republic, which holds the rotating presidency of the EU, released the above news on social media on the 2nd. After the agreement comes into effect, if the price of crude oil exceeds the threshold of US$60 per barrel, EU companies will be prohibited from providing insurance, financial and other services for Russian crude oil transportation. The G7 and Australia announced on the same day that they would set a price ceiling of US$60 per barrel for crude oil exports to Russia, which will take effect on the 5th at the earliest.