UPDATED 3:27 PM PT – Saturday, September 3, 2022
Experts are warning that proposals by the Biden administration and the EU to artificially limit prices on Russian oil could make the energy crisis worse.
According to reports on Thursday, the price-caps on Russian energy may further reduce the international supply. In turn, this would push prices even higher. This warning comes after Russian Deputy Prime Minister, Alexander Novak, said that Russia will not sell oil and gas to countries that join proposed price-caps.
OIL MARKET: Ahead of the G7 meeting to discuss a Russian oil price cap on Friday, Alexander Novak says Moscow won’t supply crude and/or refined petroleum products to those companies and nations that introduce a price cap on Russian oil | #OOTT #EnergyCrisis
— Javier Blas (@JavierBlas) September 1, 2022
However, White House Press Secretary Karine Jean-Pierre claimed that a price cap would be ‘very effective.’
“[The price cap] is the most effective way to hit hard at Putin’s revenue and doing so will result in not only the drop in [Russia’s] revenue but also global energy prices as well,” Jean-Pierre stated.
Natural gas prices in the EU have skyrocketed amid anti-Russian sanctions. Russia has increased its energy exports to Asia along with domestic consumption.