The EU still won't buy Russian oil even with a price cap, Energy Aspects' Amrita Sen says

• The European Union's upcoming ban on Russian oil supersedes a price cap, Energy Aspects analyst Amrita Sen.
• That means the EU still will not buy Russian crude regardless of the price cap, she told Bloomberg TV.
• "No one else other than the G7 has accepted it yet, and we are not expecting that to change," Sen added. 

The European Union won't purchase Russian oil regardless of a price cap, Energy Aspects' Amrita Sen said, addressing confusion in the market.

Starting December 5, imports of seaborne Russian oil will not be allowed into the EU. In addition, EU-based companies will not be allowed to provide insurance and shipping services for Russian oil cargoes headed anywhere in the world. 

At the same time, a price cap on Russian oil is planned to provide a carve-out in the EU embargo that keeps Russian supplies flowing to global markets, preventing a price shock while limiting Moscow's export revenue.

But there's a misconception that EU countries can still import Russian oil as long as they adhere to the price cap.  

"The reality is the embargo, which the EU is going ahead with on the 5th of December, supersedes the price cap. So the EU will still stop importing Russian oil regardless of the price cap," Sen said in an interview on Bloomberg TV Wednesday.

Markets are "very, very confused" on what the price cap means for supply, she added, explaining the recent fall in oil prices.

Still, while she said the EU embargo takes precedence over a price cap, she acknowledged that markets should wait to see what happens on December 5 to make sure that the EU actually follows through on its ban.

Meanwhile, Russia has warned that it won't sell its crude to any nation that participates in the price cap, and analysts have raised doubts that Moscow's top oil customers — China and India — would go along with it.

Russia also has threatened to retaliate against a price cap by taking its supplies off the spot market and causing a price spike.

Because of the EU's leading position as a worldwide provider of financial services for the oil trade, next month's round of sanctions on Russia could potentially thwart shipments outside of the EU, unless the deals fall under the price cap.

Participants in the price cap could still send oil from Russia to customers in Asia after December 5. But so far, not many countries have pledged to cooperate, and non-EU companies can also provide financial services for Russian oil cargoes.

"No one else other than the G7 has accepted it yet, and we are not expecting that to change," Sen said.