The price of goods and services is largely determined by supply and demand.
The fundamental market principle especially applies to fungible commodities, virtually identical ones.
Capping the price of commodities like oil and natural gas is doomed to fail.
Vladimir Putin, Energy Minister Alexander Novak and other senior Russian officials stressed that nations imposing a cap on Russian oil and/or gas will no longer be sold these commodities.
Russia has many willing buyers of its oil, gas and other goods.
What hegemon USA and its subservient vassals won’t buy at market prices will be sold to nations unwilling to go along with the harebrained scheme.
On Thursday, Sergey Lavrov said the following:
“We have no interest in what the price cap will be.”
“We will reach direct agreements with our partners.”
Ones “working with us will disregard caps and will give no guarantees to those who impose such caps illegally.”
Russia is “building a system (that’s) independent from neo-colonial” regimes.
US/Western sanctions harmed EU member states, their main target, not largely self-sufficient Russia.
On December 2, the Biden regime’s Treasury Department issued the following statement:
EU, G7 and Australian regimes agreed to adopt “a price cap of $60/barrel on seaborne crude oil of Russian Federation origin.”
Claiming that the policy “is an important tool to restrict the revenue Russia receives” defied the reality of its ability to sell oil based on market or negotiated pricing to many willing buyers.
Announcing finalization of the scheme on Friday, an EU statement said its agreement on capping the price of Russian oil “will enter into force on publication in the (so-called) official journal.”
In response to artificially capping the price of oil by the empire of lies and its go-along vassals, Russia’s US embassy said the following:
“We took notice of the (Biden regime’s) arrogant claims regarding the agreement with its partners on the notorious ‘price cap’ on Russian oil.”
“Strategists in Washington, hiding behind noble slogans of ensuring energy security for developing countries, maintain a wall of silence on the fact that current imbalances on the energy markets stem from their ill-conceived actions.”
“First of all, the introduction of sanctions against Russia and bans on energy imports from our country.”
“With a tenacity worthy of a better application, the collective West is trying to resolve the issues it impetuously created.”
“We are witnessing a (doomed to fail) reshaping of basic principles of free markets.”
“Steps like these will inevitably result in increasing uncertainty and higher costs for (purchasers) of raw materials.”
“From now on, no country is immune to the introduction of all sorts of ‘caps’ on its exports, (imposed) for political reasons.”
“Regardless of flirtations with the dangerous and illegitimate instrument, we are confident that Russian oil will continue to be in demand.”
The cap is scheduled to take effect on December 5 — a similar cap on other Russian petroleum products to be imposed on February 5.
According to Center for Energy Development head, Kirill Melinkov, capping the price of Russian oil by the collective West may drive its price above $100 a barrel.
OilPrice.com reported said “China and India haven’t joined the price cap bandwagon.”
“(T)heir energy security is at the top of their import policy strategies.”
The same goes for most other nations, ones eager to buy oil, gas and other commodities from Russia.
In November, Russia defied expectations by increasing oil production, OilPrice.com reported.
China, India, South Korea, Japan and other Asian countries imported a record 29.1 million barrels per day (bpd) of crude, including what Russia supplied.
On Nov. 30, OilPrice.com said “2023 is likely to see much higher oil prices.”
Commodities analyst Jeff Currie forecast $110 a barrel next year.
According to Rystad Energy, lower oil prices in recent weeks based on reduced demand from China’s lockdown is overblown.
Head of research at Energy Aspects, Amrita Sen, believes that pent-up Chinese demand will drive the price up to around $130 a barrel with or without a cap on Russian oil.
Chief financial officer at Velandera Energy Partners, Manish Raj, called capping the price of Russian oil a “joke.”
China, India, Turkey and other buyers of Russian crude negotiated their own terms of trade.
They won’t jeopardize their energy security by going along with the empire of lies and subservient Western vassals.
Ahead of the announced price cap, the Center for Strategic and International Studies said that imposing one “poses no threat to Russia’s revenue stream.”
A cap will increase the price of oil and Russian revenue.
Slamming the policy, Forbes magazine called it a “complex Rube Goldberg scheme” doomed to fail.
“(T)angled” US/Western objectives are “trying to have your cake and eating it too” by wanting access to Russian oil at the price they set — in defiance of supply and demand principles.
According to market analysis, Phil Flynn:
Imposing a cap on Russian oil is “a stupid and futile gesture.”
It “doesn’t make any sense because price caps absolutely do not work.”
“Many times they have the exact opposite effect.”
“Countries can’t even agree on what’s a fair price for oil.”
“If you come in with the price that’s too low or too high, you’re either going to restrict supply, or the price cap isn’t going to have any impact at all.”
“But at the end of the day, when you put a price cap into place and demand surges, and you don’t have that supply, the prices are going to go up, and you’re going to see shortages.”
“Russia is going to teach (the US/West) a lesson about price caps.”