US and other Western officials are finalizing a plan to impose a price cap on Russian oil despite warnings that attempting to implement the policy could send global prices soaring, Reuters reported on Wednesday.
A final price has not yet been determined, but one person told Reuters it might be between $63-$64 per barrel, the historical average price for crude. Treasury Secretary Janet Yellen has previously said a price cap of around $60 would be enough for Russia to keep producing oil.
But Russia has warned that it will retaliate against the price cap and the plan also relies on the cooperation of China and India, which have both become major buyers of Russian crude. If Russia retaliates by slashing oil production, JPMorgan Chase analysts warned prices could skyrocket to “stratospheric” levels.
Despite the risk, the US and its allies are planning to impose the cap on December 5, and a final price is going to be set in the coming weeks. Bloomberg reported that US officials were forced to scale back on the price cap plan due to skepticism from investors and market issues, but a Biden administration says it’s still going through with the plan.
“The White House and the administration are staying the course on implementing an effective, strong price cap on Russian oil in coordination with the G7 and other partners,” National Security Council spokeswoman Adrienne Watson told Reuters.
The World Bank on Wednesday said that the price cap plan was an “untested mechanism” that could reduce the flow of oil from Russia. In order for the plan to be effective, the World Bank said it needs the participation of developing countries and emerging markets.
The EU and the USA, not satisfied with the speed of the destruction of their economies via backfiring sanctions, have found yet another way to impoverish their own populations.
Yes, they are apparently confident their police state apparatus (The Patriot Act, etc.) is adequate to the job of quashing any popular rising. But MAGA-landia is pretty formidable and has to be a worry. So, we’ll see??
They can’t blow up the oil pipelines. So, they found other way to block the import of Russian oil to Germany.
Sounds a bit dicey to me… How angry is Russia going to be? Seems to me Russia won’t be too pleased about this. Then there are the oil markets… I wonder what Mr. Putin will think about all of this…
Russia has thought this through, plus all variables. Russia has had 30 years to prepare, knowing things would some day be as they are.
Hey, Thomas Friedman recently predicted that if Biden puts this in place, we’ll see $12 a gallon gasoline by December. This is NYT’s own columnist predicting this outcome…
https://www.nytimes.com/2022/10/25/opinion/putin-energy-gas-prices.html
We are in for some more terrible inflation (I just walked out my grocery store with eggs being on “sale” at $7.99 a dozen, I don’t even want to think about how much worse this will get…) if Biden continues this insane course of sanctioning ourselves…. Heaven help us.
“Western Officials Finalizing Plan for Russian Oil Price Cap If Russia retaliates by cutting production, oil prices will skyrocket”
America is about to run out of diesel fuel for trucks, construction equipment, and ships while the insane shadow government behind senile Joey Biden takes no responsibility for their Eco-Nazi programs.
Stand bye for and end to the US economy.
“If” Russia does exactly what it said it would do, and exactly what Saudi Arabia just did?
Expressing doubt about that is “whistling past the graveyard.” Simple denial, pretend.
Price controls never work. If they could somehow find a way to implement the price cap, it will cause shortages, and when they are forced to remove the price controls the price will skyrocket. Its been tried numerous times and never works in the long run. But with this out of touch Biden administration, they only seem to be able to look a couple days ahead.
Could it be rather a ploy to split off India and the Global South, especially Africa; or, to force Turkey’s hand?
Western officials are finalizing a plan to impose a price cap on Russian oil
sorry but the only way to do that is to put a price cap on everybody’s oil including OPEC’s and US oil production
Of course that is foreseen, which is why Saudi Arabia is opposing it by cutting production now to support a price of about twice this cap.