Price Caps’ will destroy global Energy Sector

Moscow: This is the road towards the destruction of world energy. There may come a time when the underinvested industry will no longer provide the market with the required volume of products. And then prices can skyrocket. And they will hurt those who are trying to implement these tools, warned Russian President Vladimir Putin. While Putin is giving this warning, the country’s Deputy Prime Minister Alexander Novak has warned that Russia will cut its fuel production by five to seven per cent from next year.

Earlier this month, the Western bloc and the European Union decided to freeze the import of Russian oil from the sea zone while controlling the price of crude oil exported from Russia. It has been decided to impose a limit of $60 per barrel for crude oil imported from Russia and 180 Euro MW/h for fuel gas. Russia has strongly opposed this and has started looking for alternative ways. Just a few days ago, it was revealed that Russia has built a ‘shadow fleet’ of over 100 oil tankers to circumvent sanctions imposed by the West.

After the start of the Russia-Ukraine war, the West imposed massive sanctions to cripple the Russian economy and oil sector. Although it has affected Russia to some extent, efforts to disrupt the fuel sector and economy have not met with much success. Many European countries, including the United States, the United Kingdom, have stopped directly importing Russian fuel. But many of these countries are buying Russian fuel in different ways.

However, the indications given by President Putin are that Russia’s policy will be more aggressive in the future. The Russian president called the price cap a step against market rules. Putin also accused Russia of trying to impose a framework on prices for fuel producers and the price cap on Russia. He also warned that the rate limit is a robbery by those with a colonial mindset.

Meanwhile, Deputy Prime Minister Alexander Novak has indicated that Russia will cut its fuel production by five to seven million barrels per day from 2023. Novak also warned that crude oil and petroleum products would not be exported to countries implementing price caps.

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