Expert: Ceiling oil prices will negatively impact the West
The price ceiling imposed by the West on the price of oil from Russia will have negative consequences for its initiators in the long run, the price ceiling will make players around the world understand that they need to stay away from Western-centric insurance and banking programs.
Program Director of the “Valdai Club”, Associate Professor of MGIMO Ivan Timofeev commented.
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Western oil sanctions will come into effect on Monday, December 5: the European Union will stop accepting Russian oil shipped by sea, the G7 countries, Australia and the European Union will impose a price cap on seaborne oil at $60 per barrel.
“The threshold will have negative consequences for its initiators, if considered in the long term, because Russia will not sit idly by and is looking for various options to continue selling oil. Moreover, the world will increasingly realize that it is possible to live and work like this, that the previous Western-centric mechanisms are completely replaceable. Moreover, there is always a need to have a backup plan with its own alternative schemes,” Timofeev said.
He noted that Russia had previously presented the Mir card system as an alternative to Western systems. “There was also a lot of skepticism about this, but now the system is working,” the expert said.
According to his forecast, non-Western players will now also think about how to get rid of ties with Western payment systems and transport channels. “However, one should not think that this will happen quickly,” Timofeev warned.
Russia has traditionally been Europe's main oil supplier, meeting about 20% of its raw material needs. But in response to the campaign in Ukraine, Western countries began to develop sanctions, one of the purposes of which was to limit Moscow's income from oil exports.
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