Moscow may face a shut-in of oil supplies if it does not agree to the price ceiling, US Treasury Secretary says
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Russia may have no choice but to sell its crude at a price set by the US and its allies if it wants to avoid a shut-in of supplies, US Treasury Secretary Janet Yellen told Bloomberg News on Saturday.
“They’re going to be looking for buyers, and we think they’re going to have a hard time selling all of it… Our estimation is there would be some shut-in on December 5 unless they’re willing to accept a price at or below the cap for buyers around the world,” Yellen explained in the interview.
December 5 is the date when the EU ban on seaborne Russian oil is scheduled to come into force. On the same day, the Group of Seven leading economies – the US, Canada, France, Germany, Italy, the UK and Japan – are expected to ban their companies from insuring, financing and providing vessels for transportation of Russian oil, unless the cost of shipments is lower than the established price cap. The actual cap level has not yet been agreed-on, but earlier reports suggested it could be set at $60 per barrel, as opposed to the current market price of around $95.
Moscow repeatedly said that it will not supply oil to countries that approve a price cap.
“The price should be formed by the market based on the balance of supply and demand… We will not supply oil to countries that will use the price ceiling. This is a bad precedent that could at any moment be extended to other suppliers, to all global trade,” Russian Deputy Prime Minister Aleksandr Novak warned last month.