NEW YORK, December 8. /TASS/. The US-led West’s imposed price cap on Russian crude may lead to a surge in global oil prices, particularly the price of Brent, to $150 per barrel, Director of the US-based investment company Navigator Principal Investors Kyle Shostak told TASS.
"The price of Brent oil may surge to $110 per barrel, but the price ceiling for Russian oil, particularly coupled with a decrease in its production, may push the price up even higher, to $150 per barrel," he said, cautioning that "in this case the US will get the opposite of the intended effect."
That said, the investor does not expect the price ceiling "to directly affect Russia’s revenues in the short-term," since Russia has enough possibilities to sell its oil. "The price cap does not cover the overland re-sale of oil in a foreign jurisdiction. The largest buyers of Russian oil - India and Turkey - are already using the services of local insurers, while China is still exploring this possibility and will in the end also likely resort to its own insurance companies," Shostak explained.
Moreover, Russia is purchasing vessels for transporting oil in a move to ensure supplies to the East, he noted. "In the meantime, Russia is gathering a fleet of its own tankers, albeit not new, but quite capable of coping with the task of supplying the East in the very short-term," the expert explained. "New deliveries from Russia will compensate for the shortage of supply that Asian consumers are facing due to the fact that oil from the Middle East and from Africa will now be directed to Europe. Theoretically, Saudi Arabia could replace Russia’s oil, though it will hardly do it being reluctant to quarrel with Russia, its partner in the global price deal," he pointed out.
G7 countries, the EU and Australia agreed to levy a $60-per-barrel price cap on seaborne Russian oil starting on December 5. Moreover, beginning February 5, 2023, price limits for petroleum products will come into effect, and their parameters will be set later. The decision on the embargo of Russian oil supplies to EU countries remained in force and also came into effect on December 5, but it should not affect fuel supplies via the Druzhba pipeline to Hungary, Slovakia and the Czech Republic. Kremlin Spokesman Dmitry Peskov said on Wednesday that Moscow's official response to the Western price cap on Russian oil would follow once an analysis of the situation is completed.