Russia will stop supplying oil to Europe this year, after the European Union decided on Friday to cap the price of a Russian barrel as a sanction because of the war in Ukraine.
“Starting this year, Europe will live without Russian oil. Moscow has already made it clear that it will not supply oil to countries that support price caps against the market," the Russian ambassador to international organizations in Vienna, Mikhail Ulyanov, wrote on his Twitter account and on other social networks. "Very soon the EU will blame Russia for using oil as a weapon," predicts the Kremlin representative in his brief statement.
European Union countries agreed on Friday to cap the price of Russian oil at $60 a barrel, as part of the sanctions imposed on Moscow for its aggression against Ukraine. In addition, the EU established that if the market price falls below 60 dollars a barrel, the ceiling will be updated so that it is at least 5% below what it has on the market.
The measure, to which the G7 powers and Australia have adhered, would not directly affect the community territory because it coincides with the entry into force, tomorrow Monday, of an embargo on crude imported from Russia, except for the one bought by Hungary by pipeline . However, the new measure prohibits European shipping companies from transporting Russian oil to third countries if it is sold at a higher price than the one set, and the same will apply to insurance companies contracted for Russian crude freight.
The crisis unleashed this weekend in the sector coincides today with the OPEC ministerial conference, the alliance of oil-exporting countries that Russia leads together with Saudi Arabia. In this meeting, the 23 member countries will decide whether to increase the level of their production in the face of the veto on the arrival of Russian oil in the EU and the other countries that apply embargoes or limits on the price of the Russian barrel. An increase in production could curb a possible rise in prices.
However, Mariano Marzo, a professor at the UB specializing in Energy Resources, is skeptical. “The oil market is more flexible than is believed and it cannot be ruled out that the shot will backfire on the EU. We will have to wait for what OPEC says today at its meeting, ”he points out.
According to March, there are two factors that cast doubt on the effects of Brussels' sanctions on Moscow. The first, the fact that the ceiling of 60 dollars a barrel is a price similar to that at which the price of a Russian barrel is currently moving. The second is the brake on the dealings of European companies with countries like China, India or Indonesia, since these countries do not want to get involved in the Russian conflict. In fact, these Asian powers have already been preparing to look for alternatives since the first sanctions began six months ago.
So nothing is clear.
This week, analysts expected that today OPEC would decide to keep production intact since its members decided to hold the conference online and not in person. The idea was that they would wait and see how the market evolves over the next few weeks, given the extreme volatility and many uncertainties. And also due to the fact that in October they applied the biggest production cut in two years, with the withdrawal of 2 million barrels per day. This measure was intended to increase prices but it did not stop the price from falling until it ended up losing practically everything it had gained during the energy crisis this year.
