The West's price cap on seaborne Russian oil and OPEC+'s decision to rollover production levels will likely have a marginal impact on oil markets in the coming months, but the developments reflect profound shifts that are reorienting the global hydrocarbon market away from the West. On Dec. 2, the European Union reached an agreement to set the West's price cap on Russian crude oil transported at sea using Western insurance at $60 per barrel, with an adjustment mechanism that will review the price level every two months and keep it at least 5% below international oil prices. Two days later, OPEC+ (the alliance of OPEC and non-OPEC oil producers, including Russia) agreed to roll over their production strategy and maintain a 2 million barrel per day (bpd) cut in quotas OPEC+ agreed to in October. The two announcements were largely expected and have only had a limited impact on oil prices,...
