The Treasury Department on Friday issued a “preliminary guidance” for a G7 plan to implement a price cap on Russian oil that is shipped by sea.
The guidance warned that buyers of Russian oil who don’t abide by the price cap could be targeted by US sanctions. It said that individuals who make “significant purchases of oil above the price cap” or provide false information about Russian oil “may be a target for a sanctions enforcement action.”
The idea of the price cap is to prohibit insurance and other maritime services for shipments of Russian oil if it is not sold at the set price, which still hasn’t been decided on. The guidance said that the price will be set by a “coalition” of countries.
The Treasury Department said that the price cap will take effect on December 5, but major questions about the plan remain, including how Russia will respond. Moscow has warned of retaliation and Russian President Vladimir Putin recently said Russia would cut off energy supplies to any countries that try to impose price caps.
As a major oil supplier, Russia produced about 10.9 million barrels per day in 2021. If Russia retaliates by cutting oil production, global prices would skyrocket. Analysts at JPMorgan Chase have warned that if Russia responds to the G7 price cap by reducing oil output by 3 million barrels per day, it would bring prices up to $190 per barrel. In the worst-case scenario, Russia would slash production by 5 million barrels, bringing prices up to a “stratospheric” $380 per barrel.
Despite the warnings, Treasury Secretary Janet Yellen has continued to spearhead the push for the price cap plan. She fears the repercussions of EU sanctions that will take effect in December and prohibit insurance for Russian oil shipments, which are still reliant on insurers in Europe.
Yellen’s price cap plan would reverse the EU insurance ban if the oil is sold at a set price. But the plan is almost doomed to fail as it relies on the cooperation of Russia, as well as China and India, who have drastically increased their purchase of Russian oil since the West began implementing sanctions in response to the invasion of Ukraine.
What a POS tyrannical entity america is. It’s own incredibly stupidest sheeple have no idea what’s happening to them
Something went seriously wrong in 2016 when the majority of Americans disapproved of both candidates.
And was repeated in 2020, each time the deep state got their candidate. Biden is even worse than W. Bush and Trump combined.
Treated like mushrooms , kept in the dark and feed on Bull Shit .
Right. Sanction the whole world. Who is sanctioned then? We are.
Agree. Committing economic suicide to avoid displeasing Biden has the potential to end the harmonious relationship between European countries and the US.
If the price cap works then there will be cheap oil, if countries do not get on bad terms with Washington they will therefore get cheaper energy – the only way the whole world will get sanctioned is in other words if they insist on paying a higher price.
The boycott failed because Asia bought the oil. It gave India an advantage vs Europe they have not known before. I have a hunch they’ll want to keep that. We might have had some leverage with the Chinese if we hadn’t deliberately antagonized them. I have a hunch they would like to make us regret that. Both countries are better off now than they would be if they cooperated, and they are both big enough to cause problems of their own if Biden pushes them too far.
There is no boycott as such – EU is still buying oil from Russia. That said the US and many EU countries have ended buying oil from Russia – but to say that this has failed is premature for several reasons:
1) India (Asia) is buying the oil at s significant discount (though that only means that the Russians are not enjoying the full advantage of the amount the prices have gone up since February).
2) The end of western dependency on Russian energy (oil especially) is needed before they can implement the price cap – before we have seen whether they can (agree to) implement this we cannot judge whether the Russians will also in the future be able to sustain their energy revenues.
So too early to tell as I see it.
If there is a working price cap they will have to build the ships to transport the oil themselves – that is not a weekend job.
Yes they are both better off, and likely they will be able to be better off for longer time if they do not cooperate, but they do not have the tanker capacity to transport all the oil themselves so if the US is able to force western shipping companies to not carry Russian oil sold at a price over the cap then they will have a challenge.
Wait a minute. EU has rejected price cap. And in G7 there are three EU countries — Germany, France and Italy. We already know Japan is exempt, So this leaves US, UK , Canada. Does it nean 3 countries within G7 can make this decision?
They could find a way of calling it a coalition decision even if only one country wanted it.
And even if only one party, the Washington based Neocon War Party, supported it. But, as per the above, they are so far out on a limb, resorting now to such desperate measure, they are still very dangerous. Probably why Putin acts with such exquisite delicacy.
To go to bed with the USA is like sleeping with a snake.
Of course, like Kissinger said to be a friend with the US is deadly.
Putin is watching it gleefully, the USA is nihilistic, suicidal.
Putin is chuckling with glee. When winter comes, either they’ll have popsicles for breakfast or G7 will turn into G3.
Germany, France, Italy and UK are doomed…!
Let’s all raise a middle finger to Joey Biden and his band of clowns!
Yanks getting desperate then , i wish Putin would go all out and finish this US / UK proxy war.
Sounds like the Russian military really sucks! Not at all what the MSM-MIC has led us to believe all these years.
Maybe they are taking a break and let economic warfare, sanctions , take care of it for them.
Putin can watch and not risk a continental war with NATO, the USA is taking care of that for him. They go on whacking the insane Europeans over the head, they are so stupid they will never know what hit them.
how can a buyer set a price cap for any product provided by literally the only seller
A buyer can set the price if the seller is dependent on others to ship the product to market and importantly does not have the option to let the oil stay in the ground.
Neither Russia nor India or China have the tanker fleets to ship the Russian oil the vast distance to their ports. The needed tanker fleets are privately owned by companies that mostly reside in western economies – that is what makes it potentially possible for the US to dictate the price.
Mind you it is not a strategy that will work for any length of time as it will provide very significant incentives for the nations wanting to buy (still cheap) Russian like India or China to build more tankers or in the case of China a bigger pipeline to carry Russian oil – though in both cases those building projects will take years.
The DC Ghouls are out of their minds and the Citizens of the USA, if there is any citizenship anymore, will suffer greatly! DC must be replaced, “lock, stock and barrel”.
Who needs enemies with friends like that?
The threat of imposing (illegal) sanctions only hastens de-dollarization among 87% of the world.
De-dollarization means no more trillion dollar budget deficits. De-dollarization means 40% of Federal Revenue going to pay interest on federal debt. De-dollarization means plenty of state and local governments going full insolvent with services and pensions slashed by 50% or more. De-dollarization means all imported goods will cost regular Americans double or triple or even quadruple today‘s prices.
The de-dollarization will be a slow grinding process taking until maybe 2029. it’s already been happening at a glacial pace, but the illegal sanctions and especially seizing of ordinary citizen‘s property means de dollarization accelerates big time
The USA is at war with the whole world, even its allies. It has only irrational, coerced allies. Sanctions are economic warfare meant to destabilize the societies of allies, war crimes committed against the allies. What idiots are in charge here? Can it get crazier than that?
Maybe it is that insanity that has Russia reducing military action while watching the self-destruction of USA/NATO? Russians can sanction too, by cutting all energy, grain, and more to USA/NATO countries.
They haven’t decided on price cap because they don’t know the Russian discounted price for selling its oil to China and India…! The question is are US and EU dumb enough to set a price cap which is above the Russian discounted price…!? OR, would Russia match the price cap?
Hard numbers: “Germany Is Now Paying Russia More Money For Fewer Import”. 45.8% reduction in imports (year ago) with The value of Germany’s imports from Russia jumped by 10.2% to $2.94 billion (2.9 billion euros) in July, compared to the same month a year ago. Trickle down from an Obama State Department War.
Are the Russians not cutting off all supplies yet?
No.
Well that’s got to be a huge relief for the Germans – it really makes you wonder, what with the Germans already being at more than 80% of their gas storage filled up – Putin will soon lose any possibility to make them feel insecure, so just when will they try to use the Germans dependence on Russian gas – when it is too late?
War turns everything to cr@p.
Sanctions the solution for every problem.
This is like a game of chicken. If the stated goal is to destroy Russia, they might as well say fuck it and let the west be responsible for destroying themselves.