The price of oil fluctuated markedly in the run-up to the boycott of Russian oil by the European Union and the G7. Meanwhile, European member states finally seem to agree on how high the price cap for Russian oil should be.
“The price of Brent oil is now around $87. It has clearly fallen in recent weeks,” says Lucia van Geuns of the Center for Strategic Studies in The Hague. ‘The price is now also fluctuating in anticipation of what OPEC will decide next Sunday, whether it will get more production back on the market and at the same time how the oil boycott will work in practice. It starts on Monday.’
Price
For weeks there has been speculation about the precise effect of the price cap, and especially its height. According to Van Geuns, the ceiling appears to move towards a price of $60 for marine oil exported by Russia. “That sum has already been roughly paid by India, China, Turkey and the Middle East in recent months.”
It has been almost six months since the decision was made to boycott Russian maritime oil from the EU. Subsequently, the G7 insisted that there was also a price cap, so that the oil market could continue to function. “There have been a lot of squabbles within the EU about the height of the price cap,” says Van Geuns. “But I think $60 is the amount to negotiate.”
Maritime
According to Van Geuns, the fact that the boycott specifically applies to “sea oil” from Russia simply has to do with the fact that Russia transports by far the most oil by sea. “Some oil is also exported via pipeline, especially to central Europe. Central European countries will really suffer if this too is boycotted, because their refineries are heavily dependent on the type of oil exported by Russia.’
Another boycott will go into effect on February 5, on Russian petroleum products. “A large part of Russia’s petroleum product exports goes to Europe, and this has to do with the export of diesel, but also naphtha and fuel oil.”
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
