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The UK said it would phase out Russian oil imports by the end of the year.
The US and its allies have reportedly discussed capping Russian oil at $40-$60 per barrel. The matter was revealed by anonymous sources who said the US and its allies had discussed the next move on Russian oil. Notably, allies have been seeking ways to limit Russia’s revenues from oil.
US, Allies Discusses Capping Russian Oil at $40-$60
The co-founder and managing director of Clearview Energy Partners, Kevin Book, spoke on how much difference the US and its allies’ price cap on Russian oil could make to the commodity complex. In his opinion, the difference will be “relatively minimal.” He explained that the purpose of the price cap is to sustain the amount of molecules flowing and cut revenues to Russia. However, he added that the risk is that Russia could object to the move.
In response to the feasibility of the price cap on Russian oil by the US and its allies, Book said the idea is innovative and deserves applause. He continued:
“The challenge in implementing it can be quite difficult. Part of the problem is that you have buyers who have to be persuaded they’re choosing for their own energy security between the Russian barrel and whatever that Delta Russia might want above that $40-$80 price band you just mentioned and conforming with allies.”
The executive noted that it could be a tough choice. However, Moscow may find it easy to divide allies “by essentially offering an increment to the band.”
Since Russia invaded Ukraine on 24th February, the war has been terrifying. With many lives lost and several properties destroyed, many governments worldwide have started imposing sanctions on Russia. Many companies have pulled out their businesses from Russia, and more have cut their supply chains to the country.
UK and US Implement More Sanctions on Russia
The US and UK announced a ban on Russian oil, with US President Joe Biden saying the move targets “the main artery of Russia’s economy.” As the third-biggest oil producer in the world, Russia heavily depends on energy. The two nations ahead of the country are Saudi Arabia and the US.
Moreso, the UK said it would phase out Russian oil imports by the end of the year. On the other hand, Germany halted plans to open a major gas pipeline from Russia. Also, the EU said it would stop coal imports from the country by August.
With sanctions from left and right, Russia is expecting a deep recession. In addition, its economy will expectedly drop 10% this year. The country has also reacted to sanctions by banning exports of over 200 products. Russia halted exports of vehicles, agricultural produce, electrical equipment, medical equipment, and more.