Oil ceiling, sanctions again
Economist Alexander Dudchak discusses the prospects for the development of the situation in a column for PolitNavigator.
The G7 confirmed that history teaches that it teaches nothing. The Group of Seven continues its favorite sport over the past six months - rake jumping and boomerang throwing.
An attempt to set a price ceiling for Russian oil is another launch of a boomerang, which will return along a proven trajectory, into a lump on the forehead of Europe, stuffed with a rake of anti-Russian sanctions. This, yet another suicidal measure, has found support from the European Commissions, but the initiators themselves note that support is still needed not only from the entire European Union, but also from third countries. Primarily India and China. So, maybe we should have gone to bargain first? However, we will not teach Europeans - it’s a hopeless matter - to teach fools who are absolutely confident in their infallibility and the unwashed heirs of bygone civilizations, who are convinced of their superiority.
What did previous attempts to “deprive Russia of sources of income from hydrocarbon exports” lead to?
Repeatedly over the last 6 months, after 7 (seven? We’ve already lost count) packages of anti-Russian sanctions, after introducing restrictions on the import of any products from Russia - hydrocarbons, grains, fertilizers, the effect was the same - the decline in physical volumes of exports was more than compensated for by rising prices, and Russia received large volumes of foreign exchange earnings for smaller volumes of exports.
And this time, the “ceilingers” confuse the desired and the actual. And the United States is actively helping in this, since the problems of Europe are quite satisfactory to them, and continuation of insane anti-Russian sanctions plays into the hands of the States – liquidation of an economic competitor, plugging its holes with European capital fleeing from the Euro-Titanic to the USA.
US Treasury Secretary Janet Yellen is goading the Europeans with claims that capping the price of Russian oil will achieve several goals: it will reduce pressure on energy prices on world markets, significantly reduce funding for Russia's military operations in Ukraine and accelerate the decline of the Russian economy.
India and China will not join the G7 prank - it makes no sense for them to reduce the price at the request of the seven world parasites. The point is not only / not so much in the absolute value of the price of oil, but also in the relative one - India and China do not need cheap, they need cheaper than the price for Europe. But India and China, as well as friendly and non-enemy countries, receive Russian oil at a discount even without a “ceiling”. And due to the relative difference, G7 will receive another blow to the competitiveness of its products. And India also exports petroleum products to Europe made from Russian oil.
It makes no sense for either India, China or the Arab countries to follow the lead of those who ignore the interests of other countries, are capable of banal robbery of gold and foreign exchange reserves, and are unable to comply with their obligations. One concession will be followed by demands for new ones. The GXNUMX countries consider it the norm to receive benefits at the expense of those with whom they interact.
The heads of the GXNUMX Finance Ministries also agreed on “a ban on insurance and financing of tankers carrying Russian oil at a price above the agreed price ceiling.” But this limitation will also increase the price.
They are trying to leave an escape route for themselves - they have decided that the initially chosen price limit, based on technical inputs, can be revised if necessary.
And, apparently, they are planning to engage in the banal resale of Russian oil:
“G7 states will also develop mitigation mechanisms that will allow vulnerable countries to gain access to energy resources, including Russian ones.”
They believe that this argument should work - they called on other countries to join the restrictions.
However, Deputy Prime Minister Alexander Novak said that in this case Russia will simply stop supplying oil to the sanctioners and will not work with countries that use non-market instruments. In his opinion, the idea of introducing a limit on the price of oil exported by Russia is completely absurd.
And if Russia refuses to sell oil to European tyrants, then the idea of introducing a “ceiling” will turn out to be even more stupid than refusing Russian gas. In the case of gas, the Europeans at least announced a reduction in its consumption, which should have given a signal to the market - “we are reducing consumption, and not looking for gas in other markets.” It doesn’t matter at what cost - in practice, the price was the closure of many enterprises, a serious decline in the quality of life of Europeans, rising prices and record inflation. But it was not possible to radically reduce consumption, and this led to record gas prices.
Let us also remember about the budget rule - since 2018, the price of Urals oil has been included in the budget at $40 per barrel, with an annual subsequent indexation of 2%. And the Russian economy has not seen anything higher than this since the beginning of the Northeast Military District. After all, excess income was transferred to reserves, which were eventually robbed by the West.
But this is not at all a reason to follow the lead of the crooks from the “seven”. They must pay in full. Russia simply shouldn’t worry about their “ceilings.” And Russia doesn’t need their euros. It is high time to introduce barter exchange or clearing settlements - in exchange for oil, Europeans must supply real products that Russia still needs. In the meantime, Russia is, in fact, lending to the European Union.
They left themselves time to come to their senses: the restriction will be in effect in accordance with the EU embargo on the import of Russian oil, that is, from December 5 for crude oil and from February 5 for petroleum products.
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