The administration of Russian President Vladimir Putin is preparing a decree prohibiting Russian companies from selling oil to countries involved in the introduction of a price ceiling, Bloomberg writes citing a source.
The decree will provide for a ban on any mention of the ceiling price in contracts for Russian oil, as well as on its transfer to countries that supported the introduction of a price ceiling, the source said.
Earlier it was reported that negotiations on the marginal price for Russian oil within the framework of the global mechanism, which Western countries intend to accept, have stalled. European countries have come up against several tough negotiating positions from Poland, Hungary, Greece and Malta and so far cannot find a consensus. Bloomberg and Politico wrote about the details of the negotiations.
The European Commission has proposed a compromise option of $65 per barrel of Russian oil, but this option does not suit the Baltic countries, led by Poland. This bloc insists that such a price level is too "generous in relation to Moscow." Other opinions are shared by countries in which the shipping business is well developed – we are talking primarily about Greece and Malta. These countries insist on the upper limit of the discussed ceiling of $70 per barrel: the higher the limit, the more opportunities for local businesses to earn on Russian oil supplies.
On Wednesday, November 23, it became known that a coalition of Western countries led by the United States agreed on almost all the critical points of the agreement, which will introduce a mechanism for limiting prices for Russian oil. The system introduces a ban on the provision of any services related to the sea transportation of Russian oil if the price of oil in the tanker exceeds the ceiling price, which is still being negotiated. The main buyers of Russian oil – China, India and Turkey – refused to join the mechanism, but the sanctions will allow them to strengthen their negotiating position with Russia and demand a higher discount.
Traders and market analysts say that setting a price ceiling in the range of $65-70 per barrel is unlikely to fundamentally affect oil trade, because Russian grades of oil are traded at a discount to the benchmark Brent grade in the range of $60-70 per barrel. Nevertheless, the Russian side still does not intend to supply oil to those countries that will join the Western price cap mechanism.