G7 countries should strike to lower price cap on Russian crude oil exports
G7 to put price cap on Russian crude oil exports
In a recent article published by RFERL, for sanctions advocates in the West, the abrupt slide in the value of the Russian ruble this year is a clear sign that the economic penalties imposed on Russia over its invasion of Ukraine are making an impact.
They say the Group of Seven (G7) countries should strike while the iron is hot and lower their price cap on Russian oil price exports, now at $60. The goal: Tighten the choke on the Kremlin’s revenue on Russian oil price and force President Vladimir Putin to choose between economic stability and military spending.
Robin Brooks said on a social media post that Russia needs emergency hikes to stabilize the Ruble. He added that G7 price cap on Russian oil price have the power to give Putin the financial crisis he deserves. Aleksandra Prokopenko seconded that opinion, arguing that sanctions are working and that lowering the Russian oil price – its main source of hard currency will put Russia’s economy in a tough spot.
Prokopenko said that G7 need to push Russian oil price cap to the brink. She added that they should go after the Kremlin’s source of revenue. Lowering the Russian oil price cap and other Russian exports, and closing sanctions loopholes.
The G7 aimed to limit Russian revenue while keeping Russian oil price flowing to global markets. It rejected calls for a Russian oil price cap of $30 to $40, afraid that Russia would cut exports. Russian oil price cap might cause economic devastation with global reach. Russia is the world’s second-largest oil exporter, after Saudi Arabia.
Craig Kennedy, a Russian oil-industry expert and associate at Harvard University’s Davis Center, says that the power of the G7 cap is being put to the test as Russian oil price surpass $60 and that if sanctions enforcement measures aren’t taken soon, the policy is at risk of unraveling.