Russia, Sanctions, and the Global Oil Market

The Group of Seven wealthy nations on Friday agreed on a plan to implement a price-capping mechanism on Russian oil exports, seeking to curtail the Kremlin’s ability to fund its war in Ukraine and better protect consumers amid soaring energy prices. Finance ministers representing the G-7 nations said in a joint statement they recognized that, for the European Union, unanimity among the 27-nation bloc is required. “We aim to align implementation with the timeline of related measures within the EU's sixth sanctions package,” they said...

New steps from Group of Seven countries to cap Russian oil sales at an enforced low price will not be replicated against OPEC producers, whose plans to cut output have irked consumer countries, a United States Treasury official told Reuters. Washington has communicated to representatives of the Organisation of the Petroleum Exporting Countries (OPEC) to reassure them of those limits to its plans and has maintained from the beginning that the cap would not target other oil producers, the official added, Reuters reports. The comments could help ease a spat between the United States and Saudi Arabia, the top oil exporter and de facto OPEC leader, over what Washington sees as collaboration with Russia to deprive markets of supply just as a global recession looms...

Just three years ago, Venezuela was a nation on the verge of collapse.

Grocery shelves were bare, the national currency was nearly worthless, millions of people were fleeing the country and a hostile U.S. government was exerting a “maximum pressure” strategy designed to oust its socialist president.

Today, the sense of despair has receded ever so slightly as the government of President Nicolás Maduro has backed away from leftist orthodoxy and the war in Ukraine has boosted oil prices and given him more leverage on the international stage...

In a joint statement, the G7 and Australia said the price cap would come into force on 5 December or "very soon thereafter". It comes after the European Union agreed on the price cap after persuading Poland to back it. The plan, which stops countries paying more than $60 (€57; £48) a barrel, needed the agreement of all EU states...

Russia has rejected a $60 price cap on its oil set by Ukraine’s Western allies and warned of a response as President Volodymyr Zelenskyy said it was “quite comfortable” for Moscow amid a push from Kyiv for a lower cap. Kremlin spokesman Dmitry Peskov said on Saturday that Russia would not accept the price ceiling, adding that it needed to analyse the situation before deciding on a specific response...

Ukraine President Volodymyr Zelensky has criticised a price cap set by his Western allies on Russian oil exports, calling it "weak"... But Mr Zelensky called the price cap "a weak position" and not "serious" enough to damage to the Russian economy. "Russia has already caused huge losses to all countries of the world by deliberately destabilising the energy market," he said in his nightly address. It is "only a matter of time when stronger tools will have to be used", he added...