This sanction mechanism is wanted by the G7 countries to limit Moscow’s income.
The Russian oil price cap, a mechanism wanted by the G7 countries to limit Moscow’s revenue, is “a bad idea“Which would give back the hand to the Russian president, said Wednesday the CEO of TotalEnergies Patrick Pouyanné. “I think it’s a bad idea because it’s a way to return the advantage to (Russian President) Vladimir Putinsaid Patrick Pouyanné, who was speaking at the Energy Intelligence Forum conference, which is being held in London and lasts until Thursday.
«What I am certain of is that if we do this then Putin will say “we do not sell our oil” and the price will not be 95 dollars, it will be 150 dollars. It’s not something I would give to Vladimir Putin“, he added.
In September, the G7 countries had decided to cap “urgently» the price of Russian oil, a complex mechanism to put in place, in particular by inviting a «large coalitionof countries to implement it, to limit revenues linked to the sale of hydrocarbons, which finance Moscow’s offensive in Ukraine. Concretely, Russia would sell its oil to these countries at a price lower than that at which it sells it today, but which would remain higher than the production price, so that it has an economic interest in continuing to sell it to them.
An idea castigated by Moscow
But India and China, among the world’s biggest oil importers, seem unwilling to fall behind the G7 at this stage, with both countries notably benefiting from discounted prices on Russian oil.
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Russian Deputy Prime Minister in charge of Energy, Alexander Novak, castigated earlier on Wednesday an idea that “would violate market mechanisms” and which could have “a very bad effecton the global industry. Evoking possibleoil shortages” in the event of the adoption of such a measure, also envisaged by the EU, Alexander Novak once again warned that Russian companies “will not supply oil to countries that use this instrument».
Shell boss Ben van Beurden was skeptical about the same proposal on Tuesday, saying he had “hard to understandhow such a mechanism could be effective. “Intervening in complex energy markets will be very difficult“, he continued, calling on governments to consult the experts before acting.