Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Russia: Oil Price May Exceed $100 amid G7, Australia’s Price Cap

Sat 03 Dec 2022 | 02:18 PM
Omnia Ahmed

Kirill Melnikov, head of the Energy Development Center, said the global oil price may surpass $100 amid the introduction of the EU’s $60 price cap for Russian oil.

"The cap level itself is irrelevant by itself because Russian companies will not sell oil under it anyway,” Melnikov said.

He added: “Accordingly, supplies of Russian oil via European shipping and insurance companies will interrupt, which may reduce Russia’s export by 1-1.5 million barrels per day in December and January. This will likely lead to a price hike above $100 per barrel.”

In a joint statement, the countries of the Group of Seven (G7) and Australia revealed that they are set to gradually phase out the use of Russian oil on their domestic markets.

"We reaffirm our intention to phase out Russian-origin crude oil and petroleum products from our domestic markets," the document read.

Members of the G7 and Australia said in a joint statement on Saturday they had agreed to set the price cap on Russian oil at the level of $60 per barrel. The decision will be effective "on 5 December 2022 or very soon thereafter."

In the same vein, the G7 and Australia also urged third states importing oil and petroleum products from Russia to leverage the price cap.

"We note that this is in the economic self-interest of these countries, as imports under the price cap will help curtail energy prices and restrict Russia’s ability to further profit off the <…> premium it has been earning."