Capping the Price of Russia’s Oil Is a Risky Balancing Act
Wall Street JournalAPR 2023
This price cap is a step in the right direction, but sanctions should have been set at $30-40 per barrel for Russia to feel the maximum bite. $60 per barrel is a tick above Russian production costs, so the Kremlin should feel relieved it wasn't more.
A so-called "cap" on Russian oil prices is an anti-market measure that destroys supply chains and can significantly complicate global energy markets. It's nothing less than a price dictatorship and Western vengeance. The repercussions of this proposal will be disastrous for everyone.
Regardless of the geopolitical intentions of the EU and G7, implementation of the price cap could be incredibly complicated to manage. The challenge for the EU and G7 is to make sure the price point is correct because if it's miscalculated, the consequences could be harmful to the entire world economy. All eyes will be on the implementation of this cap in the coming weeks and months.
It's hypocritical to impose sanctions on Russia for invading Ukraine, but not on the US for invading Iraq for equally unjustified reasons, or on Israel for invading and annexing Arab lands.