• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 6 days Does Toyota Know Something That We Don’t?
  • 6 days World could get rid of Putin and Russia but nobody is bold enough
  • 2 days America should go after China but it should be done in a wise way.
  • 8 days China is using Chinese Names of Cities on their Border with Russia.
  • 9 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 9 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 9 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 8 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 9 days Putin and Xi Bet on the Global South
  • 9 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 10 days United States LNG Exports Reach Third Place
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs

Russia Considers A Crude Oil Price Floor

The G7’s oil price cap may have went into effect on Monday, but Russia’s response is to consider putting a “price floor” under its crude oil exports, two officials familiar with Moscow’s plan told Bloomberg on Tuesday.

Russia had already said it would not ship crude oil to anyone playing along with the G7 oil price cap, and that it could even possibly respond by cutting oil production rather than ship its oil at too severe a discount, as dictated by the price cap.

The G7 price cap landed on $60 per barrel—above the level where Russian crude is currently shipping today. But that hasn’t stopped Russia from threatening to cut its oil production and creating a floor for its crude oil prices, or limiting the discount that Russian crude is trading to Brent.

The G7 price cap was created ostensibly to restrict Russia’s revenue from its crude oil sales, although capping its oil at $60 per barrel would surely fail in its mission. And if Russia were to restrict output in response to the price cap like it said it would, oil prices could climb higher, blunting even more any efforts to restrict Russia’s revenue as it continues what Russia refers to as its special military operation in Ukraine.

Russia has promised it would refuse to sell crude except at market price. What’s more, it said it would keep to that promise even if it means cutting production.

The EU and the G7 said they would review the cap every two months, with the first review in mid-January.

The current cap on crude prices will be followed in February by a price cap on Russia’s petroleum products, although that price has yet to be set.

By Julianne Geiger for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Francisco Napoleao on December 06 2022 said:
    Who could tell?
    Russia responding to market manipulation attempt by the EU...
    Can't be true?
    What will the other OPEC producers do?
    They do are aware this is an experiment that sooner or later it will be imposed on them too.
    A price floor, that is way to genius.
    Can you imagine if other producers start doing it unofficially?
    What a blow it would be?
    If there is a price cap there must be a price floor...
    The Eurocrats will get insonias tonight...
    What if OPEC decides to be generous and just universally prices oil at 100$?
    That's what they wanted...
    It will be quite interesting how much that floor will be... Will there be 2 floors, like one for the EU and one for the wider world...

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News