January 03, 2023: -The price cap was presented on December 5 and required traders using Western services such as maritime routes, insurance, and financing to pay at most $60 per barrel for Russian seaborne oil. According to Finnish refining company Neste, Urals crude is trading at around $50 per barrel.

On Tuesday, President Vladimir Putin’s decree said that from February 1, it would stop crude oil and oil products for five months for every nation that is adhering to the cap, with a different ban on refined oil products to come.

Dan Yergin, debauchery chairman of S&P Global, told Taking Stock 2023″ that despite skepticism more than whether the program would work, leaders had found a way to keep oil over coming into the market while decreasing Russian oil revenue on Tuesday.

But as a result, he said, we currently have a “divided, more politically charging oil market.”

“For the previous 30 years, since the collapse of the Soviet Union, we’ve had an increased market in which oil has much moved all over based on the economics; anticipation were Iran and Venezuela.”

“But currently, we have a partitioned oil market in which Russian oil can not go to its significant market, Europe, and the markets have been divided and that oil is flowing east.”

European countries are scrambling to find alternative sources of oil and gas and recent energy security solutions after Russia’s unprovoked invasion of Ukraine in February. The EU is getting 14.4% of its petroleum oils from Russia in the third quarter of 2022, which decreased by 10.5 percentage points yearly as it surged imports from the U.S., Norway, Saudi Arabia and Iraq.

On Wednesday, a German administration told Reuters that Moscow’s ban would have “no practical huge” for its economy, which is Europe’s significant.

Sophie Lund-Yates, a lead equity judge at Hargreaves Lansdown, stated the ban would “add fuel to the anxieties around supply.” As China’s opening is set to increase oil demand, crude costs will likely remain elevated, she stated.