EU embargo of Russian oil, G7 price cap take effect – Times of India
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Analysts and traders are skeptical about how well theprice cap will work because it may be difficult to administer and will mainly hit large customers for Russian oil like India and China. American officials have argued that they are trying to avoid a sudden contraction of supply, and the resulting spike in gasoline and heating oil prices, as the EU embargo takes hold. Russia has said it will not accept a price cap and has threatened to cut off supplies to countries that comply with the arrangement. Analysts say that Russia has been building a so-called “shadow fleet” of old tankers to export its oil and avoid the sanctions, but they are skeptical that it can assemble a large enough flotilla. If it can’t, Russia may need to begin closing down wells.
The looming embargo and the price cap were the chief reasons for OPEC and its allies, including Russia, to say on Sunday that they would leave their quotas for oil production unchanged. Brent crude, the international benchmark, was around $87 a barrel in early trading on Monday, below the $90 that many analysts believe is the target Saudi Arabia is seeking.
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