December 1, Reuters reported that European Commission Chairman von der Leyen said that in addition to Polish , EU countries have agreed to set the price limit for the EU to import Russian maritime oil at US$60 per barrel. A price adjustment mechanism was also established, and when international oil prices were below US$60, Russian shipping oil was kept at a level of 5% below the market price. As early as September this year, the G7 of the West, namely the United States, the United Kingdom, Germany, France, Italy, and Canada, reached an agreement on limiting prices on Russian oil, deciding to set a price limit on Russian oil from December 5, and limit prices on Russian refined oil on February 5, 2023, but there is no specific price regulation.
von der Leyen
This time the EU has determined the specific price limit, which is likely to become the final price limit for imported oil by Western countries . The oil industry is Russia's pillar industry and the most important source of Russia's fiscal budget. Oil and gas contribute about one-third of the budget to the government every year. Striking the oil industry can effectively hit the Russian government's fiscal capacity, thereby weakening Russia's strength, and is one of the most important economic means to attack Russia. After the outbreak of the Russian-Ukrainian conflict, the first thing Western countries led by the United States was to restrict Russian oil exports. Western countries such as the United States, Germany, Britain, France, and Japan successively announced bans on Russian oil in an attempt to further attack Russia's economy.
Russian oil mining
But what the West did not expect was that while sanctioning Russia, it caused the world's oil and gas supply to be insufficient. Oil prices continued to rise and rose, and soon exceeded US$100 per barrel and the highest was US$120 per barrel. Although Europe and the United States claimed to ban Russian oil exports, it was not actually completely banned. At the same time, Russia increased oil exports to Asia, especially exports to India and China. High oil prices have greatly increased Russia's oil export revenue. In the first half of the year, oil and gas revenue was US$97 billion, and increased by 250% year-on-year; the annual revenue is expected to be US$180 billion! This provides sufficient financial support for Russia to launch special military operations. This is something that Western countries cannot tolerate, so they thought of another way, which is to limit the price of Russian oil.
Russian oil reserve facilities
Russia's price limit on the EU is very easy and threatened that if the West limits Russia's oil prices, Russia will stop supplying oil to countries with limit prices. I have to admire the Russians' national integrity that never bows their heads, but can we really solve Western price limits by not supplying them? There are indeed many people who believe that the Seven-Nation Alliance and the EU have no effect on limiting Russian oil prices, because Russia can sell it to countries that do not limit oil prices, such as China, India and other countries. In fact, everyone has made the problem simple. Western restrictions on oil prices can really effectively hit Russian oil revenues. The editor can only say that everyone is thinking too simply. The price limits of Western countries on Russian oil can really hit Russian oil exports and returns.
EU headquarters
Main reasons: First, Western countries such as Europe and the United States are the main importers of Russian oil. Banning imports or restricting prices will significantly reduce Russian oil revenue. Taking the Russian oil export data in 2021 as an example, Russia exports 4.5 million barrels per day, and exports to Europe and the United States to 3.1 million barrels per day, accounting for 61%; while exports to Asia to 1.44 million barrels per day, accounting for 32%. Asia cannot replace the European and American markets at all. Besides, Japan in Asia also needs to ban or limit the price of Russian oil. Currently, the national crude oil futures price is about US$80 per barrel, while Russia will lose US$20 per barrel.Some people say that Russia's current export price of oil is less than US$60 per barrel. What is the significance of this price limit? The editor can only say that this is a short-term behavior. In the long run, Russia's oil exports cannot be higher than US$60 per barrel!
Super Cruise
Secondly, since the global shipping service market is monopolized by Western countries such as the EU and the UK, the price limit will definitely prohibit Russian oil from being transported to third countries by sea. Once Russia's oil price exceeds the upper limit set by Europe and the United States, Russian oil sellers may find it difficult to find insurance service providers willing to guarantee for shipping . Even if there is a buyer, it is difficult to transport to the destination. Third, Western countries such as Europe and the United States will inevitably have long arm to govern , and sanction those countries and companies that purchase Russian oil at high prices, so that no country in the world dares to buy Russian oil at more than the limit. For example, the United States imposes sanctions on Iran's oil exports. Originally, Iran's daily oil export capacity was 2 million barrels, but due to sanctions, it could only export 400,000 barrels. Because the United States announced that as long as it is a company recognized by the United States to help transport and sell Iranian oil and petrochemical products, it will be subject to sanctions from the United States, no company dares to transport Iranian oil and petrochemical products. So this time the oil price limit on Russia is a precise blow, which may cause the wallet of Putin to , , to dry up.
