Why Russian Oil and Gas Price Cap is Easier Said than Done

“The big unknown is Vladimir Putin’s reaction,” said Tamas Varga from oil broker PVM. If Putin decides to reduce oil or gas exports the plan will backfire and lead to a rise in prices: “It is a nightmare scenario—both for Europe and Russia.”

Reuters

G7 leaders have agreed to study possible price caps on Russian oil and gas to try to limit Moscow’s ability to fund its invasion of Ukraine, G7 officials said on June 28.

The officials, who include U.S. Treasury Secretary Janet Yellen, say the measure will limit the price that Russia receives for energy while allowing Western consumers to continue getting supply.

Below are some of the most commonly asked questions about the price cap and challenges it could face.

Already have an account? Log In

Sign up for FREE access to view this article now!

Unlock Free Access