IEA: The world wants Russian oil to sink despite price cap

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The global oil market will continue to want Russian oil to reach the planned value limit, Fatih Birol, executive director of the International Energy Agency (IEA), said on Tuesday.

Last month, the G7 organization of the most industrialized nations agreed to end and put into effect a cap on Russian oil values, aiming to reduce Vladimir Putin’s oil revenues for his war chest. The G7 will ban the shipment of Russian oil unless the products are purchased. at or below a safe value limit.

Many analysts and experts doubt that the price cap will fulfill its dual purpose of reducing Putin’s revenues while keeping Russian oil in circulation, because major importers China and India have signed the price cap, and because Putin could simply make good on his promise to cut off all power. Materials – addition of crude oil, fuels, herbal fuel and coal, to countries that are engaged in limiting the value of Russian oil.

Last week, a U. S. Treasury officialand industry representatives admitted to Reuters that Russia could largely escape the value cap because it would likely have access to enough tankers, transport and insurance to ship its oil. There have been estimates that Russia could simply continue to send 80 to 90 percent of its oil out of the value capitalization regime, and the estimates are “not unreasonable,” the unnamed U. S. official told Reuters.

By Tsvetana Paraskova for Oilprice. com

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