Putin, UAE president discuss Opec+, oil price cap

In another development, Russian newspaper Vedomosti said Russia is considering three options, including banning oil sales to a some countries and setting maximum discounts at which it would sell its crude, to counter the price cap imposed by Western powers.



An aerial view shows the Vladimir Arsenyev tanker at the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia. — Reuters
An aerial view shows the Vladimir Arsenyev tanker at the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia. — Reuters
by

A Staff Reporter

Published: Wed 7 Dec 2022, 5:28 PM

Russian President Vladimir Putin and the UAE President His highness Sheikh Mohammed bin Zayed Al Nahyan, held a phone call on Wednesday to discuss Opec+ cooperation and a Western price cap imposed on Russian oil, the Kremlin said.

In a statement, the Kremlin said attempts to impose the cap by some Western countries were contradictory to the “principles of global trade”.

The $60-per-barrel price cap, set by the G7 nations, the European Union and Australia, came into force on Monday as they try to limit Russia’s ability to finance its war in Ukraine.

Russia considers 3 options

In another development, Russian newspaper Vedomosti said Russia is considering three options, including banning oil sales to a some countries and setting maximum discounts at which it would sell its crude, to counter the price cap imposed by Western powers.

"The Kremlin and the Russian government are considering banning oil sales to all countries that supported the restriction," the business daily Vedomosti reported, citing two unidentified sources close to the government.

That option would also ban sales through intermediaries, not only directly from Russia. The second option being considered would prohibit exports under contracts that include the price ceiling condition, regardless of which country is the recipient.

The third option would set maximum discounts of Russia’s Urals crude to international benchmarks for sales to be allowed, the daily reported.

Deputy Prime Minister Alexander Novak said on Tuesday that Russia’s response mechanism to the oil price cap would take effect in December. Earlier, he said that Russia may reduce oil production but not by much.

Bloomberg reported that Russia was also considering setting a price floor for its international oil sales.

Concern over build-up of oil tankers

"Russia is concerned about a build-up of oil tankers in the Bosphorus Strait and is discussing the issue with insurance and transport companies," RIA cited Russian deputy foreign minister Alexander Grushko as saying on Wednesday.

t least 20 oil tankers queuing off Turkey face more delays to cross from Russia’s Black Sea ports to the Mediterranean as operators race to adhere to new Turkish insurance rules added ahead of a G7 price cap on Russian oil, industry sources said on Tuesday.

Turkish maritime authorities issued a notice seen by Reuters last month asking for additional guarantees from insurers that transit through the Bosphorus would be covered starting from the beginning of this month.

“We are aware of this situation. Of course, it causes us concern from the point of view of the interests of our operators. This problem is being discussed with transport and insurance companies. After all, insurance companies insure, not the state,” Grushko is quoted as saying.

“If the problem is not solved, of course, there will be involvement on the political level.”

Disruptions in tanker traffic from Russia’s Black Sea ports to the Mediterranean are a result of a new Turkish insurance rule, not the price cap on Russian oil agreed by a coalition of G7 countries and Australia, an official with the group said on Tuesday. — Reuters


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