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The price cap, a G7 idea, aims to reduce Russia’s income from selling oil, while preventing a spike in global oil prices after an EU embargo on Russian crude takes effect on December 5.
Analysts say the impact on oil prices may be due to sanctions imposed on Russia. This comes as oil prices dropped by over 5% from a week ago. On the 21st of February 2025, the Brent crude oil price was $77,87. On Wednesday, oil Brent crude fell to $73,26.
International oil prices remain under pressure, with Brent crude falling to around $73,26 a barrel. On Tuesday, the price of Brent crude oil stood at $74,33 a barrel.
While earlier this month it was trading at around $77,87. This follows the US and Ukraine agreeing terms on a draft mineral deal central to Trump’s efforts to rapidly end the war in Ukraine.
Analysts say this may be because of the sanctions placed on Russia.
“So, what we have seen over the last few weeks is the oil price remaining under pressure. And while we didn’t really see a massive impact on volumes of oil and gas exports coming out of Russia, I think it was certainly complicated by the sanctions that have been imposed on Russia,” says Chantal Marx, Head of Equity Research: FNB Wealth & Investments.
However, analysts say these sanctions could be lifted in the medium term.
“The idea that these sanctions could potentially be lifted in the medium term, probably resulting in a lower oil price because of the expectation that supply will be more freely available. I think we will similarly see, perhaps the under pressure on the palladium price and on nickel prices, those are also big exports. From a Russian perspective,” Marx added.
Meanwhile, analysts say tariffs are increasingly being viewed as a negative influence on global economic growth that could force additional downside revisions in global oil demand.
