Since the US and its allies began to shun Russia’s oil, there’s been little sign that the measures are inflicting the kind of pain that might force President Vladimir Putin to rethink his war in Ukraine. Other countries including China and India are still buying Russian energy, and a surge in prices has softened the blow from the sanctions. So Putin’s adversaries have hit upon a new idea: make Russia sell its oil so cheaply that it can no longer afford to wage war. The move, while hard to execute, would also help a global economy struggling with higher energy prices that have fueled inflation.
The US, the UK and Canada have announced bans on Russian oil, while the European Union plans to ban seaborne imports of Russian crude by December and refined fuels by early 2023. In a further step, the Group of Seven most industrialized countries agreed in September to implement a price cap for global purchases of Russian oil. Buyers in third countries would be able to access European insurance and finance services to facilitate oil purchases if they adhere to a price cap that would slash Moscow’s profits on those sales.