US Treasury Secretary Janet Yellen proposed to install a ceiling for oil prices from Russia at about $60, RBC reports.
So far, this does not mean anything – Yellen only voiced the proposal, and no one knows, what will be a real price ceiling, private investor, founder of the “School of Practical Investment” Fedor Sidorov explained to Invest-Foresight.
But today there was already an answer from Russia: Deputy Prime Minister Alexander Novak said that Russia will not sell oil to those countries that join initiative, regardless of the level of cost of our raw materials. This means that from December (when the price ceiling begins to operate) the G7 countries (project initiators) will not receive oil and oil products (there will be a price cap on them also, but a little later) from our country. This is the USA, Canada, United Kingdom, Japan, Germany, France, and Italy. Total volume of the raw materials from Russia that these states received is more than 200 million tons per year (data for 2021). This is almost 70% of the total exports on world market, and for Russia oil and petroleum products accounted for 37% in its export structure.
“The refusal of the Russian Federation to supply oil to these states will lead to market destabilization and price growth. According to some forecasts, the price of a barrel of oil for the global market could soar to $150 a barrel or higher, – the expert warns. – And our country will be able to redirect some of these volumes (up to 40%) to the markets of China, India and other Asian countries, not joining the initiative to limit prices for raw materials from the Russian Federation.”
As a result, developed countries will again face high energy and fuel prices, with further inflation increase and recession in economics, Fedor Sidorov summarizes.