Enforcement of Russian oil price cap problematic – Washington Post – RT Business News

The G7 wants to deprive Russia of oil revenues while maintaining supplies

The latest move to set a price cap for Russian crude announced by the Group of Seven nations last week could run into significant difficulties, The Washington Post reported on Friday.

The scheme pushed by the G7 (United States, Canada, United Kingdom, Germany, France, Italy and Japan) aims to solve several problems simultaneously. It aims to reduce the revenue Moscow receives from the sale of crude on the world market, while maintaining energy flows to the West and also controlling world oil prices.

The plan, which is seen as a top priority by US Treasury Secretary Janet Yellen, includes the banning of services such as insurance and financing to ships carrying Russian crude above an agreed price level.

Analysts interviewed by media fear the ban could be easily circumvented if countries outside the G7, such as China and India, continue to buy Russian oil above the price cap before reselling it in the markets. worldwide at a higher price.

“The devil is in the details, and few details emerged today,” Bob McNally, a former energy official in the George W. Bush administration told the Post. « This was a process announcement, moving from exploring a price cap to implementing it. »

According to Simon Johnson, a professor at the Massachusetts Institute of Technology, the price cap plan, which would allow Russia to trade oil at a discount, would be less disruptive to world markets than Europe’s earlier idea of ​​cutting all Russian oil imports.

Experts have also warned that Russia could retaliate by cutting natural gas shipments to Europe more sharply, saying such a scenario would deepen the economic crisis already gripping many Western countries.

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