As G7 Quietly Shelves Russian Oil Price Cap Idea, Biden Will Beg Mideast Allies To Pump More
by Tyler Durden
Thursday, Jun 30, 2022 - 11:45 PM
"To be honest we haven't spent much time discussing the timesink idiocy of the Biden/G7 "Russian oil price cap" idea because well, it is idiotic as Rabobank explained...
The ‘oil cap’ is simple in theory:
The G7 will refuse to provide insurance to any vessel that carries Russian oil unless the cargo is sold with an agreed price cap.
Yet it won’t work and will just push oil prices higher.
Russia will never agree. China and India will never agree either. Russia and China may offer their own underwriting services, which would force the West into physically blocking cargoes and confronting China - as a Russian-oil carrying ship is stopped in the US, says the Wall Street Journal.
Plus, the G7 are already not taking Russian oil: they are taking Russian oil from India and China that is being on-sold.
... and it appears that finally even the dumbest people on earth, i.e. career politicians and economists, [and some TD members] have figured it out.
Reuters reports that according to EU officials, the biggest price cap proponents - the governments of Germany and other European Union countries - voiced "caution" in a closed-door meeting about price caps on Russian oil, a day after the Group of Seven economic powers agreed to urgently start work on the matter,
Here is the truncated timeline for those who missed it:
On Tuesday G7 leaders agreed to explore “the feasibility of introducing temporary import price caps” on Russian fossil fuel, including oil, and tasked ministers to evaluate the proposal urgently.
But just one day later, Germany’s envoy to the EU told his counterparts in a restricted meeting that the world should be “realistic” about the proposal, which he said was added to the G7 statement after “intense pressure” from Washington, according to one official who attended the meeting.
And then, the envoy also said an agreement on whether to apply caps was not expected to come anytime soon... or any time for that matter as it is impossible.
Then there are the holdouts: Hungary and Belgium also raised concerns at the meeting about the G7 statement on sanctions, the official said, with Hungary explicitly backing Berlin’s caution on oil price caps. A second EU official familiar with the talks confirmed that Germany and others had expressed wariness about oil price caps.
A German government official said on Thursday that “success of this plan depends on international cooperation", which is precisely what we said.
Of course, neither China nor India will ever agree to cooperate with the G7 if it means losing out on access to extremely cheap oil (the alternative is Russia just halting exports and sending the price of oil to $200+).
Stefano Sannino, secretary general of the EU’s diplomatic service said on Thursday that a price cap would only be effective if universally applied, and so agreement would be needed across the G20 countries, not just the G7.
“You need to be sure you do not have distortion of trade and then the only thing that is happening is that essentially oil goes to other places with other carriers and insured by other companies - and so the price remains the same,”
Sannino told an EU-UK Forum conference"
Continues at:
As G7 Quietly Shelves Russian Oil Price Cap Idea, Biden Will Beg Mideast Allies To Pump More | ZeroHedge
More NaGastan "promises" failing to deliver.
More heavy rain due in Trat province today.