DISINFO: Gas price cap violates market principles and harms Europe more than Russia
SUMMARY
The proposed gas price cap not only violates every market principle, but it also does not eliminate the risk of fuel shortages in Europe. [...]
Many Europeans fear that the price ceiling is not high enough. And if gas costs less in the EU than in Asia, fuel tankers will simply go where it is more profitable to trade. Then Europe will face an even greater deficit and a mountain of problems.
For the most part, these restrictions do not scare Russia. Even before these restrictions were introduced, we started to look east. This is due, among other things, to Europe's statements about its intention to abandon Russia's energy resources.
RESPONSE
The narrative is part of the recurring disinformation campaign surrounding the energy sector and sanctions on Russia. The aim of these narratives is to belittle and denigrade Western sanctions on Russia.
The price cap for Russian oil cannot be seen as a violation of market principles and it was initiated by G7 states and supported by the EU as an additional sanction for Russia’s unprovoked aggression against Ukraine. Sanctions against individuals or political regimes have always existed alongside market dynamics to control harmful practices like corruption, terrorism, illegal warfare etc.
As noted in the Council of the EU's press release: The price cap on Russian oil will limit price surges driven by extraordinary market conditions and drastically reduce the revenues Russia has earned from oil after it unleashed its illegal war of aggression against Ukraine. It will also serve to stabilize global energy prices while mitigating adverse consequences on energy supply to third countries.
The price cap on Russian oil is a novel tool that the energy market has not seen in recent years and this could give a period of uncertainty. However, the impact is expected not to be so critical. According to the New York Times, the processes around the price cap are "not expected to have a sudden impact on oil supplies for Europe, because the regulation has been in the works for months and so traders and shippers have had time to adjust. In particular, energy companies have already begun buying more oil from the United States, Brazil, Guyana and the Middle East. The EU is also giving exemptions to some countries like Hungary, whose energy needs depend on flows of Russian crude by pipeline, to quell their objections to the sanctions".
The claims in the article seek to distract attention away from the fact that the price cap is the biggest problem for Russia, not Europe. It is predicted that Russian oil output is set to fall by 1.4 million barrels per day in 2023. Chatham House provides a prognosis that one particularly important point when it comes to oil, energy, and commodity markets has been how market forces have mitigated Russia’s own efforts to use the energy card against the West, particularly against Europe.
See similar cases that Sanctions don't affect the Russian economy; the New York Times reports that Russia is barely affected by sanctions; sanctions against Russia worsen the economic crisis in the West; The EU lost more from sanctions than Russia; European sanctions against Russia do not work.