The Group of Seven will impose a price cap on Russian oil that’s well above where it now trades.
If there was ever any doubt what the premise of the cap was, it’s now clear: the US and its allies want Russia ’s crude to keep flowing.
“We think the number at $60 a barrel is appropriate” to balance limiting Moscow’s ability to profit and ensuring supply meets demand, John Kirby, spokesman for the US National Security Council, said Friday, adding that the cap can be adjusted going forward.
When the price cap was first floated as an idea, many thought it unworkable without key buyers such as India and Turkey on board, or extraterritorial penalties to deter breaches and incentivize adoption.
Washington also argues that if Russian oil is already trading at a deep discount, the threat of the price cap can take some of the credit.
And the Kremlin’s reaction remains a big unknown.

Source - Economic Times

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