Capping Russian oil prices, a mechanism sought by the G7 countries to limit Moscow’s revenues, is “a bad idea” that would give the Russian president back his hand, said
on Wednesday by TotalEnergies CEO Patrick Pouyanné.
“I think it’s a bad idea because it’s a way to give the advantage back to (Russian President) Vladimir Putin,” said Pouyanné, who was speaking at the Energy Intelligence Forum conference, which is being held in London and runs through Thursday.
“What I am certain of is that if we do that, then Putin will say +we are not selling our oil+ and the price will not be $95, it will be $150. That’s not something I would want to give to Vladimir Putin,” he added.
In September, the G7 countries had decided to “urgently” cap the price of Russian oil, a mechanism complex to implement, including inviting a “broad coalition” of countries to implement it, to limit revenues from the sale of hydrocarbons, which finance the offensive of Moscow in Ukraine.
In concrete terms, Russia would sell its oil to these countries at a price lower than that at which it sells it today, but which would remain higher than the production price, so that it has an economic interest in continuing to sell it to them.
But India and China, among the world’s largest oil importers, do not seem willing to get behind the G7 at this stage, as both countries benefit from discounted prices on Russian oil.
Russia’s Deputy Prime Minister in charge of energy, Alexander Novak, earlier Wednesday blasted an idea that would “violate market mechanisms” and could have a “very harmful effect” on the global industry.
Referring to possible “oil shortages” in case of adoption of such a measure, also considered by the EU, Mr. Novak warned once again that Russian companies “will not supply oil to countries that use this instrument.
Shell boss Ben van Beurden was doubtful on Tuesday about the same proposal, saying he had “difficulty understanding” how such a mechanism could be effective.
“Intervening in complex energy markets will be very difficult,” he continued, calling on governments to consult experts before acting.
