The oil price was slightly higher at $88.30 after OPEC+ agreed to leave its current output targets unchanged while the G7 $60 price cap on Russian seaborne oil came into effect.
Victoria Scholar, head of investment at Interactive Investor, said: “There are a lot of moving parts in the oil market at the moment with uncertainty around the outlook for Chinese demand as well as global demand as the extent of the economic slowdown is yet to be seen.”
“Meanwhile the cartel is waiting to see whether the new Russian cap goes anyway to impacting market prices.”
Agreed upon on Friday, the European Union along with Britain, Australia, Canada, Japan and the United States have imposed the price cap, with the 27-country European bloc also imposing an embargo on Russian oil shipped by sea.
The cap will stop any Russian crude sold for more than that price from being shipped using G7 and EU tankers, insurance companies and credit institutions.
Russia — which is the world's second biggest producer of crude oil — has said it will not accept the price cap and threatened to stop exporting oil to countries adopting the measures.
Shell (SHEL.L) was also in the green but nowhere near a rally as investors are still uncertain about the direction of oil prices.
“Oil prices had been slipping in general since June amid concerns about a global economic slowdown, yet they seem to have found a floor around the $84 per barrel level, having twice bounced from this level in recent months,” Russ Mould, investment director at AJ Bell, said.
“Many investors holding stocks in the oil and gas sector will have had a fortuitous year thanks to the surge in prices in the first half of 2022, with Brent rising from $78 to a peak of $127. However, it’s not been a one-way ticket to riches as these stocks have seen as many ups and downs as a rollercoaster at Alton Towers.”
While the measures will most certainly be felt by Russia, the blow will be partially softened by its move to sell its oil to other markets such as India and China, who are currently the largest single buyers of Russian crude oil.
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“As the G7/EU oil price cap of $60 on seaborne Russian crude kicks in, OPEC and allies chose to roll over current production quotas but said they would not hesitate to adjust output to stabilise the market,” Neil Wilson, chief market analyst for Finalto & Markets.com, said.
“Russia’s deputy PM Alexander Novak said Moscow will not export oil to countries participating in the price cap, even if that means they need to cut output. Crude gapped higher at the open last night but has been falling throughout the Asian session with spot Brent at $85.80.”
Kremlin spokesman Dmitry Peskov, asked in a conference call how the oil price cap might affect the war, said: “The economy of the Russian Federation has the necessary potential to fully meet all needs and requirements within the framework of the special military operation, and such measures will not affect this.”