The ceiling on Russian oil prices and the EU oil embargo mean “new economic shocks,” the Russian central bank said.
Russian central bank analysts are predicting “new economic turmoil” due to a $60 per barrel price cap on Russian oil and an EU ban on Russian oil exports.
The European Union, the G7 and Australia agreed to cap the price of Russian oil, which came into effect on Monday. In addition, the EU also banned the transportation of Russian oil by sea.
The two measures could “significantly limit” Russia’s economic activity in the coming months, analysts at the Russian Central Bank’s Research and Forecasting Department said in a report released Wednesday. They stipulate that their conclusions may differ from the official position of the institution.
Decrease in economic activity
Uncertainty around the sanctions and restrictions came as the Russian economy recovered from a “short-term downturn” caused by President Vladimir Putin’s partial mobilization of men for the war in Ukraine in October, according to the central bank. Bank analysts attribute the recovery to an increase in government orders for goods.
While Western restrictions on prices and imports of Russian oil could limit the country’s economic activity in the short term, analysts say the country’s production could decline in the long term.
Russia responds to sanctions
Moscow has condemned the cap on Western prices for oil exports and is still working on a response to those caps, Kremlin spokesman Dmitry Peskov said Wednesday, according to the state news agency RIA Novosti.
Russia is considering several options to counter the price cap, including a ban on oil sales to certain countries and a maximum discount on its flagship Urals crude compared to Brent crude, Russian business newspaper Vedomosti reported Wednesday, citing two sources close to to the cabinet of ministers. .
Source: Wprost
