Price cap for Russian oil from G7: what will happen next, and whether the Kremlin's threats should be taken seriously

September 03, 2022

The right step towards the complete dismantling of Putin's regime

Maksym Bielawski, energy expert at Razumkov Centre, former PR director of "Naftogaz of Ukraine" NJSC, views the decision to impose restrictions on Russian oil and petroleum products as an announcement of a new, more efficient package of sanctions against the aggressor state.

"Furthermore," he continues, "this is actually an announcement of creation, so to speak, of a global association of oil buyers, because G7 accounts for more than 32% of global oil consumption. This decision also indicates the final stage of energy solidarity of the civilised world ".

Maksym Bielawski emphasises that this step was a hard one. Russian propaganda was involved, agents of influence worked.

"However, this correct step towards complete dismantling of Putin's regime has been taken. After the establishment of the price cap for Russian oil, the budget revenues of the aggressor country will fall by several times," the expert explains. "If today, Russian oil is sold with a discount of 20 to 40 dollars per barrel, after the new restrictions come into effect (in winter), it will cost 20-25 dollars per barrel. This is even below the cost of its production. So, in 2023, most likely in the second half of it, we should expect significant problems with budget revenues of the aggressor country and, accordingly, a slowdown of its military machine. Undoubtedly, such a decision of the G7 should be welcomed. It even came as a surprise to me. A pleasant one. I think that on the eve of the G20 summit, to be held in Indonesia in November, there will be more news about sanctions against the Russian Federation".

According to Maksym Bielawski, there is a lot of speculation and manipulation about the price of oil after the introduction of these restrictions.

"I don't think it will rise. Russian Urals oil is a reference brand. It is not traded on world exchanges. It is an ordinary grade, one of 23. And given that the price signal for the sale price of the grade comes from the reference brand, restrictions in the price of a certain grade will not affect the increase in prices for the oil standard, — the expert assures. — Such a price restriction does not limit the volume of supply on the global market. Therefore, even a certain decrease in oil quotations is expected. After all, sellers of other grades will have to compete for buyers. Who, of course, will go for a cheaper type of oil. The issue of a mandatory increase in oil prices after new restrictions against the Russian Federation is pushed either by propagandists of the aggressor country or its agents of influence. This is an element of informational pressure."

The only thing that causes concern, Maksym Bielawski admits, is that after the introduction of the price cap on Russian oil, a new wave of Russian terrorist attacks may begin, to prevent arrival of new volumes of oil in the global market. Provocations are possible on sea routes of supply (such as obstruction of navigation through the Suez Canal, the Bosphorus and the Dardanelles).

"The beast is cornered by the entire civilised world. She is very dangerous. But she must be driven to the end," the expert says.


Maksym Bielawski

Leading Expert, Energy Programmes

Born in 1986 in Zhytomyr oblast


Zhytomyr State Technological University (2008)

Ph.D in Technical Science (2010)

Ivano-Frankivsk National Technical University of Oil and Gas (2012)

Author of 17 patents and 100 scientific works

Work Experience:

2008 – 2011 — Operator of Gas Infrastructure Units, Controller of Gas Transmission System in Rivne Division of PJSC "Ukrtransgas"

2011 – 2017 — Leading Engineer, Deputy Head of Press-Service, Head of Public Relation Department of PJSC "Ukrtransgas"

2017 – 2018 — HR Director of PJSC "Maine Gas Pipelines of Ukraine", Advisor to the Minister of Energy and Coal Industry of Ukraine

2021 — Director of Integrated Communications of NJSC "Naftogaz of Ukraine"