in the EU, attention is being discussed to ensure that Russia sells the price of oil at a price below the market price.
It remains to make sure that Russia has “irresistible oil” to supply its oil on such terms.
Washington, June 2 – IA Neftegaz.RU. The EU is considering taking measures to enable Russia to sell oil at below market prices.
On June 1, 2022, US President D. Biden announced this in a game in the White House.
Theses from D. Biden:
- we have a problem now – Europe
- there are many considerations that can be made, perhaps even continue to buy oil, but at a limited price,
- One possibility is that Russia would have an irresistible need to supply oil, but it would be sold at a much lower price, formed by the one that is now established in the market.
D. Biden did not provide additional details.
EU countries May 31, 2022 verified agreements on 6mu a takeover package against Russia, including a partial embargo on Russian oil imports, excluding pipeline shipments.
Ultimate 6th the package has not yet been agreed upon, it will enter into force after publication in the Official Journal of the EU.
In parallel with the partial oil embargo in the EU and at the Russian G7 level, other restrictive measures against Russian oil were discussed.
One of these measures could be a cartel of buyers that includes EU G7 countries not driving devices (US, Canada, UK, Japan).
It is obvious that such a large cartel, due to its scale, can set marginal prices for Russian oil.
Another question is that Russia produces its oil under such conditions, and if so, in some volume.
Russia is actively restructuring oil export routes, in 2022 Asia for the first time became an importer of Russian oil, ahead of Europe.
This restructuring is accompanied by an accumulation of discounts on Russian oil, which occurs when prices above the benchmark Brent and WTI crudes are holding at $110/bbl.
However, for oil-consuming countries, high oil prices pose a serious problem – rising fuel prices accelerate inflation, increase the cost of logistics and hinder economic recovery after the 2020 pandemic crisis.
To curb the rise in oil prices, member countries of a special energy agency (IEA, all G7 countries are members of it) keep a record of the volume of oil withdrawal from their strategic reserves.
The head of the IEA, F. Birol, said earlier that the admissibility of new agreements on the withdrawal of capital to the market, but the decision should be made by all IEA countries.
Earlier, the United States called for the fact that in the issue of mandatory compliance with the embargo on oil supplies from Russia, it is unlikely to have an impact on the rise in oil prices in the world.
However, the EU nevertheless decided on a partial oil embargo against Russia, after which the price of Brent oil jumped to $120/bbl, but has now corrected to $113/bbl. including on the statements of D. Biden.