UPDATE: The G7 countries agreed Friday to implement the Russian oil price cap. In response, Russia announced they are cutting off Nord Stream gas exports indefinitely.
Treasury Secretary Janet Yellen and other finance ministers from the Group of Seven are set to meet virtually on Friday and outline their plan to implement a price cap on Russian oil, which experts have warned could send oil prices soaring if Russia doesn’t comply.
According to The Wall Street Journal, after the meeting, the G7 ministers are expected to release an endorsement of the price cap plan and commit to finalizing its implementation.
The idea of the price cap is to limit Russia’s profits from oil sales, which are higher now than before the war while keeping the oil on the global market so prices don’t increase. Yellen has been pushing the idea over fears that oil prices will skyrocket once the EU’s Russian oil ban takes effect on December 5.
Russia has plenty of other markets to sell its oil, but the EU ban will also apply to insurance on shipments of Russian crude. Russian oil shipments still rely on insurance from the EU and Britain. Russia could find alternatives, and Russian officials have hinted at providing state guarantees for shipments, but there will still likely be an initial shock to the market.
Under Yellen’s plan that the G7 ministers will discuss, the EU insurance ban would be reversed if Russian oil is being sold at a set price. But the plan relies on compliance from Russia, and Moscow will not want to sell its oil at a price set by the West.
The plan also relies on compliance from China and India, who have become major buyers of Russian oil in the wake of the Western sanctions campaign. China and India are already purchasing Russian oil at a discount, and have little reason to rock the boat with Moscow. Even if the countries say they will comply, insurance companies have said it would be hard to enforce the set price.
If Russia responds to the attempted price cap by cutting oil production, experts have warned prices could skyrocket. In the worst-case scenario, analysts at JPMorgan Chase said oil could shoot up to a “stratospheric” $380 per barrel. Oil prices are currently hovering around $100 per barrel.
Well, this seems to be part of the California plan to eliminate gas-powered cars starting in three years (yes, three years — when sales will be limited). So — does this remind anyone of various schemes by the old USSR to uber-manage the economy? That all backfired and which in large part were responsible for the demise of that experiment in Total Governmental Control?
By 2035. Gas powered lawn mowers will not be sold in CA after starting 2024 (however, current lawn mowers can be rebuilt, repaired). I live in CA (a hot part) and I an tell you we do not have the infrastructure to service millions of electric cars.
The elites have been driving out gas lawn mowers here in Bay Area for decades because of noise. Too costly to pay for raking (what, pay the mow-and-blow guy MORE?). Electric quieter (90 decibel gas vs 68ish electric), but need frequent recharging because few homeowners let the m-and-b guy use an electric outlet. Batteries — don’t get me started. Rare metals — China? sole source? no problem! Disposal — hmmm, that’s a biggie. Ah, technology – where government and “good intentions” collide.
Russia has said they will not sell to any country that has an oil price cap.
More than that. They will not sell them not just oil, but gas as well. Every bit of Russian goodwill has been exploited. Russia was still selling Europe has, struggling with turbine issue that Canada took it sweet time to repair and return. Under most hostile ratioships trying to meet contractual obligations.
OK. This may be the end of the “turn another cheek “ for Russia.
It is fine. Europe and US do not want Russian energy.
But what puzzles me is — whinning! Why whining about Russia? Why not wanting to pay? I am sure there will be now plenty of whinners all over media about horrible thing Russia is doing weaponizing energy! Only in the West can brains be so rewired to not get the link between cause and consequence,
This only works if the world goes along with retarded Joey Biden.
Looks like more black market oil will sell.
Or, we will pirate another Iranian ship.
It doesn’t even have to be “black market” oil; just “free market” oil, sold in rubles, yuan, or rupees, outside the US manipulated banking and insurance systems. The ONLY people this will hurt are in the US and UK banking and insurance industries.
Since the first effort to tamper with the market failed, Yellen has come up with a new and more exotic way to tamper with the market.
The beauty of this proposal is that it holds out hope that tampering with the market will achieve it’s intended effect long after reasonable people would have given up. The last country standing wins a chance to drink the kool-aid!
Any idea what flavor?… Kiwi perhaps?…
All “attempts” to resolve this crisis only deepen it. International leaders need to look to history if they hope to avoid what say they are trying to avoid – world war.
https://patternofhistory.wordpress.com/
We need to face the real risk that these guys want a world war. They imagine a post war returning the US to its post WW2 dominance. Won’t happen, but that is the fantasy.
Historically, Nations often convince themselves they can win the war that they can’t, because dominance and power is the true motivation.
Time for a price cap on LNG exports from the US, or the world will let us overthrow democracies and provoke war like we have in Ukraine, whenever and wherever we want. I suppose we only manipulate the ‘free’ market to create massive corporate profits for us, not to undermine those profits merely to help allies we’ve sworn to protect.
Now here is a VERY GOOD idea
What could go wrong? (Sarcasm). Some of most impactful stories are not at the headlines. “Everyone should understand that any action that would threaten the security of our troops (in Transdniestria) would be considered under international law as an attack on Russia, as was the case in South Ossetia when our peacekeepers were attacked by (former Georgian President Mikheil) Saakashvili,” Lavrov said. From (Russia Warns Moldova Not to Threaten Its Troops in Breakaway Region)
“which experts have warned could send oil prices soaring if Russia doesn’t comply.”
What part of this don’t they understand?
This is the most INSANE idea EVER.
Another stupid idea from west…!
The US already undermined the dollar, from being the petro-dollar world reserve currency. Then it attacked US banking dominance by manipulating SWIFT. Now this will undermine dominance of the maritime insurance industry, which can just as well be provided by China or Russia itself.
The more this circus engages in ever so exotic acrobatics, the more it looks like the primary economic targets are US allies. Europe bas ready committed economic suicide. First they curtailed Chinese high tech, such as Huawei 5G, nuclear power electric plant construction, sea ports modernization, and other infrastructure. Now, through an entirely US provoked war in Ukraine, the land trade links to Asia are disrupted, and the lifeblood od economy — its energy — is being curtsiled. It was not sufficiently curtailed — so, the so called price cap is designed to insure Europe has no energy source, Kerping Iran, Venezuela, Libya and Iraq energy limited from accessing world narkets, US wants to be the arbiter of acces to energy. First destroy your allies, insuring they have nowhere else to go but to US in addressing their desparate needs.
And eventually, forcing the producers to accede to US conditions.
Asian allies are still reluctant — Japan keeping investment in Russian gas field — but squeezing them is not a priority. Squeezing Europe is. And with co-conspirators in Johnson, Macron, Scholtz, and Zelenski — time is ripe to clobber Europe. Get their currency down to destroy imports, empowerish population. It will not matter who they elect — the plan I am sure will continue.
Russia and China cannot be tackled until US controls its allies, and destroys their ability to be wealthy independently of US designs.
It seems that India and Middle East are getting it, Good chunk of Asia is getting it. Some in Latin America as well. The entire Africa gets it.
But will they be able to resist the power of their elites tempted by the untold personal wealth and protection coming from the West? Like Zelenski — he has a personal wealth to fall back on, why would he care how many Ukrainians die. Remains to be seen.
I would expect this price cap to be as successful as the sanctions have been.
Russia will circumvent it and the G7 will inflict further finacial hardships on itself and the rest of the world.
Read an article saying this is all about making Europe more reliant upon the U.S. in order for the U.S. to maintain its position as the preeminent power. Declining powers will go to desperate measures to maintain its power even if it means going to war.
Of course. We look at the world as a unipolar one, where we write the rules. Think we have been nasty in the past, you just wait.
I have read much the same thing.
The US was desperate to shutdown Nordstream 2.
If Nordstream 2 went through then what would be the point of large American bases in Germany ?
To protect Germany from its largest trading partner ?
Years ago Europe had a choice to integrate Russia into the EU or not to.
Excluding Russia went a long way to entrenching power amongst Russian Nationalists.
Russia already said that if the price cap is imposed, all countries complying with it will be refused Russia oil. So that pretty much kills that idea except for the stupid EU which will continue their suicide.
Over at The Saker there is this article laying out what the EU is going to go through…
Unicorns Are Real
https://thesaker.is/unicorns-are-real/
It don`t mean jack shit without China / India signing up.
Russia should just stop exporting to the West and let oil go above $340 a barrel.
I nice way to tell obama to eat it!
Obama hasn’t been president since 2016. He didn’t have influence then and he doesn’t have any now. You’re obsession of him is clownish.
Only a fool fails to follow news stories. Instead of leaving Washington obama opened an office several blocks away from the White House. The leader of the democrat party is obama and he does consult with senile angry Joey Biden quite often!
Stupid is as stupid does buddy, wake up and think for yourself!
Why do you think it’s necessary to live in Washington to run any political party. King Donald is doing it from Florida. So, your reasoning is based on Obama’s proximity? Brilliant.
Obama is just a little further up the Soros food chain. Biden is just a useful idiot…literally.
A lot of suicides will take place in Europe by the end of this winter…! It only takes One Winter for EU people to realize their governments are following a conspiracy to destroy them…!
It won’t work.
One of the dumbest things I’ve ever seen.
Enforcing this by withdrawing insurance doesn’t work. If you know something about how maritime insurance works. The insurance companies will have to scour the globe looking for ships carrying oil. If a ship says the oil it carries is from Indonesia, insurance companies will have to find out how the oil came to Indonesia, etc.
You might say, surely it must be easier to find errant oil carriers. It isn’t.
https://www.zerohedge.com/geopolitical/europe-brink-70000-czech-protesters-flood-prague-over-energy-crisis
Protesters flood Prague over Energy Crisis.
Now she’s going to destroy the London and EU insurance industry, sheer economic genius.
I would say that this is one of the dumbest ideas to come along in quite some time but it’s hard to believe these countries actually believe that Russia will go along with their price cap scheme, so what is the real agenda?.
Neoliberalism will do anything to gain control over Russia. Failed playbook that Russia had time to plan since the ouster of Yeltsin.
As I have written elsewhere, it’s time for Europeans to go online to Air BNB and look for a nice, affordable winter rental in Russia. Southern Russia, say, just outside Sochi, where their Euros will go a long way and — “Crank up that thermostat! — they will be all toasty and warm.
We the dummies just do not get it — energy majors will make a killing on the incfease of price. And they need it — they are all swimming in red ink after buying out bankrupt small fracking companies — inheriting their debt, The huge Ponzi scheme is bigger than derivatives market.
So, the price NEEDED to go up. Why do you think we curbed energy sales from Venezuela, Iran, Iraq, Libya? And now Russia? To push prices up. To make our fracking oil and gas marketable by finally making it economically feasible to build port facilities and specialized LNG ships, The bonus is degrading German industry, wrecking a budding relTionships.between Chinese, Russian and European economies.
By increasing our interest rates, get
European capital desparate for earnings in tanking economy to migrate to US. Getting euro and pound to historic lows. A plus. We vet their goods cheaper.
the US is trying to blow up the world economy……and hopes somehow to be the last nation standing
Yellen is a total nutcase
This combined with our refusal to rejoin the Iranian JCPOA deal and insistence on punishing Venezuela (for who knows what), will ensure a massive spike in oil prices.
The only thing left to do is to piss off Canada to put the U.S. back into the stone age. We need to consult w/native Americans on how they burned Buffalo dung.
Yellen; another senile, dementia suffering old bat, with one foot in the grave, trying hard to remember what it was like to be an active, thinking person, following the lead of her even more senile, demented and geriatric “boss” Biden – two evil old crones. trying to inflict as much damage on the world as they can before their hardened arteries finally give it up and their too-long lives finally end.
Russia will simply sell oil to other countries. This move benefits the USA producers and their exports however prices are going to go up for Americans.
https://journal-neo.org/2022/09/04/us-dependence-on-russian-uranium-and-sanctions-policy/
US Dependence on Russian Uranium and Sanctions Policies