Western allies are scheduled to approve a price cap on Russia’s oil exports on Wednesday. The cap will ban companies from providing shipping and financial services needed to deliver Russian crude unless it is sold below the agreed limits.

However, Moscow has repeatedly said that it won’t supply crude or oil products to nations that implement a price cap. Besides, capping Russian oil prices won’t solve the world’s energy problems.

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Earlier this week Russia said it will either redirect its crude supply to market-oriented partners or will slash production. The measure could lead to a potential deficit in oil supply and any commodity where such a mechanism is applied.

Some observers suggested that Russia could also take strong measures and cut its oil production, thus creating an artificial shortage of the commodity on the global market.

As a result, the G7, which is seeking to cap Russia’s oil at around $65-$70 a barrel, would end up buying the commodity substantially higher than $100.

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Also the group of those championing price capping is not big enough to overhaul existing rules of the global energy game.

There are plenty of world players who are buying Moscow’s crude regardless of the West’s sweeping energy embargo. India and China have not signaled any willingness to join the G7 bandwagon so far.

While the G7 plan largely relies on prohibiting shipping and insurance companies from providing services to Russia unless the latter bows to the Group of Seven demands, Moscow has already created its own fleet of tankers and insurance companies to deliver crude to its customers.

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Russia’s oil tankers could also be insured by IPJSC Ingosstrakh, the legal successor of the Chief Agency of Foreign Insurance of the USSR founded in 1947.

It’s the country’s fourth-largest general insurer, which already covers some 2,000 vessels, according to the US mainstream media.

While G7 is pushing ahead with its price capping, the most likely outcome will be higher crude prices and further de-globalization of the world’s market. Time will tell who will benefit the most from it.

Sputnik / ABC Flash Point Trade News 2022.

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Tibor Brown
Tibor Brown
Member
26-11-22 02:57

The Western Zionist career gangsters have become so predictable in their evil actions, that Russia is able to prepare itself for certain positions, so when time comes for new sanctions or whatever what, Moscow has already anticipated their own defense and established survival tactics in order to stay afloat and continue to develop for prosperity of their citizens.

At the same time the West is imploding and collapsing under its own weight, where hyperinflation causes poverty amongst their own taxpaying survivors..