This interview (Arabic video; English audio above) was recorded the evening of 29nov22 as the EU struggled over how low to set the price cap.
Soon, it will be agreed, and will gradually become devastating for Russia.
As new non-Russian oil resources are developed (e.g., in Guyana, Suriname, UAE, Iraqi and other fields) and/or oil fields come back online (e.g., Venezuela, Libya, …), the EU and G7 will feel confident to further lower the price further and further below the price of Brent and WTI crude.
This will slowly squeeze Russian exports from its remaining Asian and Turkish markets.
In the end, Russia will lose the vast majority of its export market and be selling at deep discounts wherever it still can..
The Biden administration wants to go this route of price caps to prevent EU sanctions causing a sudden shock, a near total cut of all Russian crude, when the EU’s sanctions come into force banning purchase of any seaborne-delivered Russian crude in Europe. These sweeping import sanctions come online on 5 December.
The Biden administration wants to slash Russian revenues from oil exports (and from gas); but they don’t want to cause a sudden supply-shortage shock in doing this.
As Fathi Birol, head of the International Energy Agency (IEA) has recently once again said – and as I have also said repeatedly: Russia is losing “forever” its European market for oil and gas – at least as long as Putin’s regime is in power. It will be reduced from the status of an energy superpower it enjoyed before its invasion of Ukraine, to that of a second-tier OPEC state.
Eventually, it will lack sufficient funds to both pursue its aggression against Ukraine and keep its domestic economy afloat.