Oil war🧵
EU’s sanctions package on Russia will impact countries like India. EU is capping what other countries can pay for Russian oil. It bans the sale of oil above that price. This applies only to oil transported by sea. Won’t hurt EU members importing Russian oil by pipeline
EU’s sanctions package on Russia will impact countries like India. EU is capping what other countries can pay for Russian oil. It bans the sale of oil above that price. This applies only to oil transported by sea. Won’t hurt EU members importing Russian oil by pipeline
How can EU decide the price of Russian oil? Through insurance & shipping firms. Commercial oil tankers need massive insurance. European insurers rule this market. EU sanctions will forbid these insurers from providing services to Russian companies selling oil above the price cap.
Russia is the world's largest oil exporter. EU sanctions (8th package since the Ukraine war began) aim to force Russia to reduce prices & lose oil revenue. But at imports to the tune of 1.7 million barrels per day, the EU is still the biggest market for Russian crude.
Meanwhile, OPEC+ (includes Saudi Arabia & Russia) has announced oil production cuts to “stabilise” prices. Fuel bills will rise further. Bad news for Biden just before US mid-term polls. He’s slammed the OPEC+ decision, will release oil from national stockpiles to control prices.
OPEC+ says decision to cut production “technical, not political.” Comes 3 months after Biden flew to Riyadh to woo Crown Prince MBS. He refused Biden's request to increase oil output. Oil producers (led by traditional US-ally Saudi Arabia) are clearly siding with Russia.
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