Russia won’t supply oil to ‘price cap’ participants — head of Central Bank
Moscow will redirect deliveries to other countries instead, Elvira Nabiullina said

Russia won’t supply oil to ‘price cap’ participants — head of Central Bank
FILE PHOTO: The Minerva Symphony oil tanker, seen at the Black Sea near Novorossiysk, Russia, August 12, 2021 © AP

Russia will stop supplying countries that cap the price of its oil, the nation's Central Bank head Elvira Nabiullina announced on Friday. Moscow has argued that a price ceiling would make oil more expensive and hurt Russian producers.

Nabiullina said that instead of complying with a price limit, Russia would redirect its supply to countries not imposing such a limit.

Her comments came a day after Russian Deputy Prime Minister Alexander Novak issued a similar warning, telling Russia’s Channel One that a price cap would drive revenue lower than the cost of production, and that Russia’s producers “simply will not work a negative profit.”

US luring India to join anti-Russia oil cartel – Reuters
Read more US luring India to join anti-Russia oil cartel – Reuters

Seen by the US as a means of lowering global oil costs while simultaneously denying Russia revenue, the possibility of a price cap was agreed by the leaders of the G7 nations during their summit in June. Participating countries would deny shipping and insurance to Russian oil priced above a set rate..

The participation of only a small number of countries would have a global effect, as British and European companies currently insure 85-90% of seaborne Russian oil cargoes, according to figures from the Brookings Institution, a US think tank.

While no concrete price has yet been set, Japanese Prime Minister Fumio Kishida recently suggested that the upper threshold for a price cap would be set at around half the current market price for Russian oil.

Russia has warned that attempting to artificially cap oil prices would be counterproductive for the West. “There will be significantly less oil on the market, and its price will be much higher,” Security Council Deputy Chairman Dmitry Medvedev stated, predicting that the price cap, if it goes ahead, could drive the cost of a barrel of oil above $300-400.

https://www.rt.com/business/559472-russia-stop-oil-exports/

On Friday, July 22, 2022 at 2:28:53 PM UTC-4, stoney wrote:
> Russia won’t supply oil to ‘price cap’ participants — head of Central Bank
> Moscow will redirect deliveries to other countries instead, Elvira Nabiullina said
>
> Russia won’t supply oil to ‘price cap’ participants — head of Central Bank
> FILE PHOTO: The Minerva Symphony oil tanker, seen at the Black Sea near Novorossiysk, Russia, August 12, 2021 © AP
>
> Russia will stop supplying countries that cap the price of its oil, the nation's Central Bank head Elvira Nabiullina announced on Friday. Moscow has argued that a price ceiling would make oil more expensive and hurt Russian producers.
>
> Nabiullina said that instead of complying with a price limit, Russia would redirect its supply to countries not imposing such a limit.
>
> Her comments came a day after Russian Deputy Prime Minister Alexander Novak issued a similar warning, telling Russia’s Channel One that a price cap would drive revenue lower than the cost of production, and that Russia’s producers “simply will not work a negative profit.”
>
> US luring India to join anti-Russia oil cartel – Reuters
> Read more US luring India to join anti-Russia oil cartel – Reuters
>
> Seen by the US as a means of lowering global oil costs while simultaneously denying Russia revenue, the possibility of a price cap was agreed by the leaders of the G7 nations during their summit in June. Participating countries would deny shipping and insurance to Russian oil priced above a set rate.
>
> The participation of only a small number of countries would have a global effect, as British and European companies currently insure 85-90% of seaborne Russian oil cargoes, according to figures from the Brookings Institution, a US think tank.
>
> While no concrete price has yet been set, Japanese Prime Minister Fumio Kishida recently suggested that the upper threshold for a price cap would be set at around half the current market price for Russian oil.
>
> Russia has warned that attempting to artificially cap oil prices would be counterproductive for the West. “There will be significantly less oil on the market, and its price will be much higher,” Security Council Deputy Chairman Dmitry Medvedev stated, predicting that the price cap, if it goes ahead, could drive the cost of a barrel of oil above $300-400.
>
> https://www.rt.com/business/559472-russia-stop-oil-exports/

Biden had announced the selling of 1 million barrel a day of US Strategic Oil Reserve
(filled to ~721 million barrel last December) last March 30. Such release probably reduces
US gasoline price at the pump does drop from its Jun high.
https://charts.gasbuddy.com/ch.gaschart?Country=USA&Crude=f&Period=12&Areas=USA%20Average%2C%2C&Unit=US%20%24%2FG

But the oil market is still tight. Iran had increased it oil selling price a few days ago.

"As reported, NIOC’s official selling price increase affected four grades of Iranian oil
namely Light, Heavy, Soroush and Forouzan.
The NIOC had set the August OSP of Iranian Light grade for Asia at $8.9 a barrel above
the Oman/Dubai average, up $2.80 from the previous month.

The prices for Iranian Heavy, Forouzan, and Soroush grades are also set to be $5.6,
$5.65, and $1.45 above the Oman/Dubai average, respectively.
Iran has been shipping its oil into the global markets successfully despite the U.S.
sanctions and over the past year, the export of Iranian crude oil increased significantly.

In late June, Head of Iran’s Planning and Budget Organization (PBO) Massoud
Mir-Kazemi announced that selling oil was better than before.
“The price of oil and its export has increased and selling oil has become better,”
Mir-Kazemi told reporters on the sidelines of the cabinet meeting on June 22.""

https://www.tehrantimes.com/news/474793/Iran-raises-August-OSP-for-Asian-buyers

As is, Russia has little reason to accept imposed price cap from without.