If the West caps prices on Russian oil, Moscow will not shoot itself in the foot

Russia will not "shoot itself in the foot" by selling oil to those countries that cap prices on Russian oil, Kremlin spokesman Dmitry Peskov said, RIA Novosti reports.

Russian President Putin has voiced Russia's position on the matter before, although there are "a lot of nuances" in it, Peskov said.

On November 25, EU diplomats postponed negotiations to set restrictions on Russian oil.

G7 countries agreed to cap prices on Russian oil on September 2. The price restrictions are to be imposed for oil and petroleum products starting from December 5, 2022 and February 5, 2023, respectively.

At the same time, G7 members plan to develop a special mechanism to allow those in special need to gain access to Russian raw materials.

Urals oil loses 28 percent since autumn

Meanwhile, the cost of Urals grade oil fell to $52 per barrel on November 22 — the lowest since late 2020. Such a reduction occurred against the backdrop of expectations of European sanctions.

Urals oil is already more than $30 behind Brent. It is almost $20 below the Russian budgeted price of $70.1 per barrel. Urals grade oil has thus lost 28 percent in price since the beginning of autumn.

It appears that the Russian budget, which was adopted with a deficit of three trillion rubles for 2023, will face new challenges if the situation does not change for the better.

Li Haidong, Professor of the Institute of International Relations of the Chinese University of Foreign Affairs, believes that the only country that benefits from capped prices on Russian oil is the United States. In his opinion, European countries come to realise that Washington is proposing the EU to introduce restrictions against Moscow only for its own benefit and profit.

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Author`s name Editorial Team
Editor Dmitry Sudakov