The West’s policy of limiting Russian oil prices creates risks for the oil market and creates uncertainty when stability is so needed, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said. He compared such actions to efforts undertaken in the U.S. to pass the NOPEC law, designed to counter OPEC.
“The NOPEC law and the extension of the price cap are very different things, but their potential impact on the oil market is the same. These policies create new risks and uncertainty at a time when clarity and stability are most needed,” the minister told Energy Intelligence.
Such policies would inevitably exacerbate market instability and volatility and negatively impact the oil industry, bin Salman said.
The decision of the European Union to impose an embargo on both petroleum products and oil was made last summer. Oil sanctions, with a six-month delay, came into force on December 5, fuel sanctions came into effect two months later, on February 5.
Russia also prepared its own counter-sanctions in response to non-market actions of Western countries. Late last year, President Vladimir Putin signed a decree banning supplies of Russian oil and oil products if a price ceiling was directly or indirectly stipulated in the contract with the counterparties. The ban is effective as of February 1 for oil, while the date for oil products is to be determined by the Government. The overall duration of the decree is still limited to July 1 this year.