The G7 has a geometric impact on the "price limit" of Russian oil

U.
S.
Treasury Secretary Yellen recently issued a statement saying that the G7 has reached an agreement on imposing restrictions on Russian oil prices, and looks forward to finalizing the specific implementation plan
of the price cap in the coming weeks.
The G7 will seek to build a broader coalition urging all countries to commit to importing Russian oil
within the price ceiling.

The logic of this move by the United States and the West is to force Russia to sell oil at such a low price that it can no longer afford to maintain the Russian-Ukrainian conflict
.
Russian presidential press secretary Dmitry Peskov responded that such a plan, which will lead to serious instability in the oil market, is "very absurd", and if unfriendly countries really implement this plan, Russia will begin to supply oil
only to countries that operate according to the laws of the market.
Lofter, director of the Washington Institute for Global Security Analysis, also believes that the idea of limiting the price of Russian oil is "quite funny", Europeans and Americans talk about letting Russia sell oil at $40 per barrel, but the result will see international oil prices rise to $140 per barrel, "you can't challenge the law of supply and demand in the oil market.
"

In the more than half a year since the outbreak of the Russian-Ukrainian conflict, the United States and the West, including the G7, have made a fuss
about Russian oil, natural gas and coal.
The United States and Canada have "theoretically" refused to buy Russian oil since this spring, the United Kingdom completely stopped importing Russian oil and gas in June, while Japan, as well as Germany, France and Italy, sharply reduced Russian oil imports
.
On May 30, the European Union announced a ban on the transportation of Russian oil and petroleum products
by tanker from December this year.
However, the actual results have disappointed those who support sanctions
.
Since February, Russia's fossil fuel export revenues, including oil, coal and natural gas, have reached 158 billion euros
.
At the same time, Russia's current account surplus from January to July this year reached $167 billion, 3.
34 times that of the same period last year, and it is expected to hit a record high
for the whole year.
Despite the decline in Russian fossil fuel exports, revenues are much higher than in previous years, as average fossil fuel prices this year are more than
double those of the same period in 2021.

According to the price ceiling concept set by the G7, the price of oil sold by Russia will be limited to between $40 and $70 per barrel, which is much
cheaper than the market price.
However, Russia will not sit still
.
On the one hand, Russia will completely cut off the supply
of crude oil to unfriendly countries for at least some time.
Although this move will not collapse the global energy market, international oil prices are likely to soar to $140 to $160 per barrel in a short period of time and eventually stabilize at a high of around $120 per barrel
.
On the other hand, Russia can adopt "asymmetric warfare", using what Europeans call "natural gas weapons"
.
At present, all underground natural gas storage facilities
have been opened in Europe.
But the question is, where do they take gas from? Which pipe to draw gas from? Entering the winter, the Europeans will have to tap into gas reserves, and the stock gas will quickly decrease.

As a result, it is likely that the price of natural gas futures will soar to $10,000 per thousand cubic meters
in a wave of panic.
The United States and the West, especially European countries, have to think twice before they move
.

In fact, the G7 accounts for only about 45% of global GDP, 70% less than 30 years ago, and cannot cover the international
oil market.
Even authoritative analysts in the United States believe that the Western world has overestimated its own strength
.
"It's like in a bar where my friend and I asked the boss to
limit the price of beer," Löft noted.
The owner said he wouldn't sell us
beer.
We were happy sitting here, we didn't drink beer, but we observed that the bar was already full and everyone drank a lot of beer
.
At this point, we have a question: what should we do next? ”

China, India, Indonesia and many other countries do not support the policies of the United States and the West towards Russia and oppose further restrictions and embargoes
.
Kazimatis, the president of the U.
S.
oil giant and United Refining, said that "everything we did to the Russians became a caricature and did not work.
"
The first is that India and China do not support the G7 plan
.
Russia has replaced Saudi Arabia as India's current second-largest oil supplier, and India still resells Russian oil to the West
at a considerable price.
Russia's exports to the United States, the United Kingdom, the European Union, Japan and South Korea fell by 2.
2 million barrels per day in July, but two-thirds of them were transferred to other countries
such as China and India, according to the International Energy Agency.
At the same time, American businessmen are cleverly bypassing sanctions and actively buying Russian oil
.
Even the Wall Street Journal had to admit that American oil traders concealed the origin of Russian oil and shipped it to the United States against the will of the
US State Department.

Experts at the US analyst agency Energy Intelligence expect global oil demand to increase by 2.
3 million barrels per day in 2022, slightly higher than the forecasts
of the International Energy Agency and the US Energy Information Administration.
The stagnation of drilling and investment activity in the U.
S.
oil industry, as well as the reluctance of OPEC countries to increase production amid the repression of Russian oil, could push oil prices above
$120 a barrel.
And the idea of the United States and its allies setting a price cap on Russian oil could lead to instability
in the entire market.
If oil traders can buy Russian oil for $60 a barrel, why buy it elsewhere at a high price; Again, if it is possible to buy cheap Russian oil, then why continue to invest in expanding oil production? Kazimatistis said that the Biden administration's promotion of a "green economy" characterized by suppressing oil and gas consumption has caused the US Strategic Petroleum Reserve to fall to an all-time low, and now "it is time to increase U.
S.
crude oil production, not fight Russian oil.
"

Prokhvadylov, director of the Russian Academy of Realpolitik, predicts that any intervention in the global energy market will lead to an increase in oil prices, and when the world economy comes out of stagnation and begins to accelerate, oil prices will skyrocket, "from Russia's standpoint, we do not need to prevent them from committing suicide.
"