On Monday, gasoline prices lowered caused by low global energy demand as Europe banned Russian oil products.
Gasoline futures for March delivery plummeted by -0.47% to $2.31 per gallon on February 06.
The US Bureau of Labor Statistics reported a 1.50% decline in fuel prices over the last year.
In December, the UK and EU decided to ban seaborne imports of oil products from Russia. The Group of Seven allied democracies’ ban is followed by a price cap.
Moreover, it targets the continuous flow of Russian diesel in China and Russia. It is also done to avoid sudden price hikes that would affect consumers.
Russia’s dilemma now is finding new customers, not avoiding the price ceiling. According to analysts, prices may still bump as the markets sort out changes.
However, the ban would not lead to a price hike if the cap works as intended and Russian diesel flows to other countries.
Furthermore, the European Union said that the importers had sufficient time to adjust to the ban since it was announced in June.
Also, the Group of Seven nation’s set the global price cap at $100.00 per barrel of premium oil products such as diesel. Also, oil came at $45.00, and other fuels like gasoline.
EU’s Ban Won’t Fully Stop Russian Fuel Flows
The banning of Russian fuel products, like gasoline, raised some alarms, yet the ones who will benefit from this are traders and shipping countries. As a result, the fuel flows will continue, but they will go through more complex, roundabout routes.
In addition, the Russian diesel price has soared in Europe since it invaded Ukraine. Now, the prices have declined, caused of the ban’s impacts.
With the price cap, any third-world country would still have access to critical services for the nation’s cargo. However, they would be able to do so if they paid below the price cap.
According to analysts, they should keep depriving Russia of the means like fuels and gasoline to wage war with Ukraine.