Price Cap on Russian Oil May Lead to Imbalances in Economy – Karin Kneissl

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File photo taken on March 12, 2019 shows operating oil pumps in Luling of Texas, the United States. U.S. oil prices turned negative on April 20, 2020. West Texas Intermediate crude for May delivery shed more than 300 percent to settle at -37.63 U.S. dollars per barrel on the New York Mercantile Exchange. (Xinhua/Wang Ying)
(Xinhua/Wang Ying)

Imposing price cap on Russian oil may result in imbalances in the economy, former Austrian Foreign Minister Karin Kneissl told Sputnik on Wednesday.

“Adoption of the price cap, in my opinion, does not comply with the logic of ‘demand-supply’ categories. While they are trying to restrict or curb the demand, the price will rise again. It will lead to imbalances,” Kneissl said at the Eastern Economic Forum (EEF) in Vladivostok.

The former minister noted that she did not understand the logic of those who try to intervene in market processes, adding that oil is a global product in the international market, and there will always be ways to sell it for a certain price.

Last Friday, G7 finance ministers confirmed their intention to impose price caps for Russian oil and called on all nations to support the initiative. The price cap is planned to take effect on December 5 for crude oil and on February 5, 2023, for refined products coming from Russia. Moscow, in turn, pledged to stop exporting oil altogether to the states that support the cap.

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