The G7 countries have decided to implement a price cap on oil exports from Russia, set to begin on 5 December 2022, in an attempt to defund Russia’s war effort.
However, most Twitter influencers spiked in September see this as a redundant plan are of the opinion that G7 countries may not be very successful in implementing the price cap, reveals the Social Media Analytics Platform of GlobalData.
Smitarani Tripathy, Social Media Analyst at GlobalData, said: “The sentiment of Twitter influencers is mostly negative around ‘price cap’ on Russia oil, as most of them see this as a redundant plan, because Russia may retaliate with a production cut, or it may go to some other market with higher discount.
“Some influencers also shared their thoughts on Russia’s top importers in the Asia market, China and India, which may not agree to a coalition with G7 countries.”
GlobalData’s Social Media Analytics Platform captured a few popular influencer opinions on the oil price cap.
Lauri Myllyvirta, lead analyst at Centre for Research on Energy and Clean Air, said: “There is a strong case for rationing in the case on the right but price caps remain a terrible idea.
“Two possibilities: rationing succeeds in balancing supply and demand at a price below the cap >> cap is redundant; and rationing doesn’t succeed >> cap causes shortages.”
Robin Brooks, Chief Economist at Institute of International Finance, tweeted: “The G7 price cap
1. Strong opposition to this in markets
2. Most think Putin will just cut production
3. The G7 are seen as having the weaker hand
4. Little appreciation how vulnerable Russia is
5. Russia has no oil tankers & no storage
6. Production cuts kill Russian oil wells.”
Deepak Shenoy, CEO and Founder at Capitalmind, opined: “The US and Europe want a price cap on Russian oil.
“Russia simply refuses to sell oil at the cap, and will sell to India and China instead, at roughly 15% discount to brent.
“India needs energy security more than biased policy following, and China doesn’t give a damn.”
Alicia GarciaHerro, Chief Economist for Asia Pacific at Natixis, tweeted: “Putin probably has no choice but to accept China’s leading role in the region.
“He needs China to buy more oil and gas in light of the West price cap.
“More importantly, Russia needs China to continue to export semiconductors for its civil and military industry.”
Steve Hanke, Economist at Johns Hopkins University, said: “The EU has no idea of how to deal with the energy crisis of its own making.
“A price cap (read: price controls) will do nothing but dig a deeper hole.
“Price controls have a perfect record of failure.”
