European Ambassadors Agree on A Russian Cap On Oil Prices


 

The suicide of Europe—the so called collective west—by means of economic sanctions on Russia will ultimately impact and devastate them far worse, and continue to diligently dig their own graves. Tell me if this statement by U.S. Treasury’s Harris makes any logical rational sense on the part of Russia. Setting aside that the Nord Stream Pipelines have been blasted. Why is the U.S. Treasury orchestrating this?

Oilprice.com

Many analysts and experts doubt that the price cap would serve its dual purpose of cutting revenues for Putin while keeping Russian oil flowing because top importers China and India haven’t signed onto the price cap, and because Putin could simply make good on his promise to halt all energy supply—including crude, fuels, natural gas, and coal—to the countries that sign up to cap the price of Russian oil.

“As long as we preserve the flow of Russian oil, we consider this a win,” the U.S. Treasury’s Harris said at the conference today, as carried by Reuters.

“The price cap can be considered a release valve on the (EU) sanctions package,” Harris said, noting that “It transforms the ban from an absolute ban to a conditional ban.”  

“This oil cap will help reduce Russia’s revenues and keep global energy markets stable,” European Commission President Ursula von der Leyen said.

Euronews is funded in whole or in part by the European Union

 

 

Why is the U.S. Treasury orchestrating this?

U.S. Treasury seeks phased G7 oil sanctions as EU ban looms

But concern is high that the EU sanctions will drive oil prices still higher, increasing economic pain in countries sanctioning Russia where inflation has already hit multi-decade highs. The United States also wants to shelter emerging markets from the ripple effect of sanctions, Harris said.

The risks have put the United States and the G7 in the paradoxical position of trying to guarantee Russian output, albeit at prices that deprive Moscow of revenue for its invasion.

The price at which Russian oil sales will be capped has not been decided, Harris said, adding it will be high enough to provide an incentive to maintain output and above the marginal production cost for Russia’s most expensive oil well.

European Union ambassadors reached an agreement on Wednesday to impose a new package of sanctions on Russia, including banning maritime transportation for Russian oil to third-party countries unless the oil is sold below or at a certain price cap.

“Ambassadors reached a political agreement on new sanctions against Russia – a strong EU response to Putin’s illegal annexation of Ukrainian territories,” the Czech rotating presidency of the EU said in a tweet today.

In fine print it is stated that all EU countries must agree.

 

The eighth package of sanctions includes “Prohibition of maritime transport of Russian oil to third countries above the oil price cap and a ban on related services.” The additional sanctions also extend import bans on goods such as steel products, wood pulp, paper, machinery and appliances, chemicals, plastic, and cigarettes. The EU is also banning the provision of IT, engineering, and legal services to Russian entities and is expanding the tech-export ban.  

The political agreement on the price cap contains measures to soften the impact of the sanctions on EU member states with large shipping industries and fleets, such as Greece, Cyprus, and Malta, sources with knowledge of the matter told Bloomberg.

Earlier this week, Ben Harris, Assistant Secretary for Economic Policy at the U.S. Treasury Department, said that the Treasury is looking to structure a three-phased approach to the G7 sanctions and price caps on Russian oil to keep Russian crude and products flowing, but at lower prices. The G7 group of the most industrialized nations will first target Russia’s crude oil, then move on to include diesel at a second stage. Finally, the lower-value products such as naphtha will be part of a third phase, Harris said at the Argus European Crude Conference in Geneva on Tuesday.  

From Zero Hedge

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19 Responses to “European Ambassadors Agree on A Russian Cap On Oil Prices”

  1. peter3nj Says:

    While we analyze then criticize Biden and his administration’s suicidal energy policies is it little more than pissing in the wind? Democrats are out-fund raising and outspending republicans and while FOX and friends play the Pollyanna game the real polls have most republicans trailing, hanging on by the skin of their teeth. Who in their right mind believes most Americans know why food and formula-if you can find it- prices are rising, fuel for cars and home heating continues to rise, drug and illegals proliferation are byproducts of this administrations plan to destroy not only the country but individuals freedoms and lifestyles.
    Let’s get simple here in this supposedly advanced and educated nation with a majority of citizens who prefer to make aborted baby body parts a billion dollar industry rather than pop a pill once a day, defund it’s police, destroy education while teachers unions support sex education for toddlers, college students can’t read, write or add two columns of numbers. And yet conservatives and economists are relying on the electorate voting with sound judgement, a luxury as rare as Biden not falling off his bike, Jill wearing a moo moo that wasn’t bought at a thrift shop or KHO keeping a straight face. Oil everywhere and not a drop to drill.

    Liked by 1 person

  2. Bill Heffner Says:

    Is it just me, or does it look like out leadership is simply making statements to the world and then ignoring the world’s replies? We tell the world that they are not permitted to buy Russian oil (sanctions, sanctions!!), and they buy it anyway. So then we tell them the maximum price they are permitted to pay for the Russian oil that they are buying after we told them they couldn’t buy it at all. To sort of state the obvious, if they are rejecting our orders not to buy Russian oil, why are they going to follow our orders regarding the price they pay for it?

    We just look stupider and stupider. Giving orders to people who already aren’t following our orders.

    Liked by 2 people

    • bunkerville Says:

      Bill.. this is why I toil away at this topic. And now the coup de gracie we will buy dirty oil from Venezuela at what price as they are in bed with China? Any price as we sit this very moment on barrels of it… I can only hope something gives and soon.

      The world laughs… indeed they do. And it is so very dangerous.

      Liked by 1 person

    • Mustang Says:

      American politics is like a package of Lorna Doone wafers … you always know what you’re going to get.

      Liked by 1 person

  3. Politic Chic Says:

    More officers walking off job, running for office to push back against defund-police movement

    Liked by 2 people

  4. Mustang Says:

    Ben Harris currently serves as Assistant Secretary of the Treasury for Economic Policy (2021 – ), previously serving as Chief economist and economic advisor to Vice President Joe Biden (2014 – 2016). Note: it’s amazing all these people who have advanced degrees in a specialized area, but the only place where they can find a job is in the government sector.

    Harris graduated from high school in 1995, stayed in college through 2011, found work in the U.S. House of Representatives (2011 – 2013), and finally went to work for Dopey Joe in 2014. Harris has done nothing else than feed at the public trough — so one wonders how can someone with no more than theoretical knowledge becomes so entrenched in government policymaking.

    Ben is part of the Biden Group Think … which should answer your initial question. And um … you will notice that he was 34 years old before finding his first job.

    Liked by 2 people

    • bunkerville Says:

      Thanks Mustang.. you went where I was tempted to go but I thought I probably already knew the deal.. and this rounds out this moronic administration that refuses reality. It never occurs to them the “what if” of Putin. And of course, my gal EU Von de Leyen is right there in it.

      Liked by 1 person

    • Mustang Says:

      I’ve heard it said that the acorn never falls too far from the tree. Your girl Ursula married into German royalty but comes from a family of Belgians who regards themselves as German. Ursula’s daddy was a high-ranking politician in post-war Germany (interesting, to say the least), her brother owns a music streaming company, and her grand-daddy was a psychotherapist/mystic. Ooommmmhhhh. Ooommmmhhh.

      Ursula received a Doctor of Medicine degree, achieved by plagiarizing someone else’s work but she was allowed to retain her degree because while the charge of plagiarism is valid, it was “probably inadvertent.”

      No, you can’t make this stuff up. Before becoming Queen of Europe, she taught medicine at Buggermebuggeryou University.

      Liked by 1 person

  5. Ed Bonderenka Says:

    In terms of representative government, I feel extremely under represented.
    And OPEC says, forget 1 million barrels per day oil production cuts.
    We’ll go 2 million.

    Liked by 2 people

    • bunkerville Says:

      This is forcing the deck chairs to be arranged that in no way will benefit us. Buried with a vague reference in the clip will be the denial of shipping insurance…..inflation like we have never seen before.

      Liked by 2 people

    • markone1blog Says:

      Ed,
      The OPEC lowering production (probably in response to either:
      1. Biden’s political move of releasing from the SPR to lower gasoline prices in the US prior to the mid-terms
      2. Biden’s selling the SPR at under-market prices (which they promptly sold)

      Liked by 2 people

    • markone1blog Says:

      What really ticks me off is how Biden is having his EPA strangle the Permian Basin in Texas with faulty data. It’s all politics.
      If Biden really wanted to lower gasoline prices, he would let the producers in the Permian Basin and Bacaan Basin produce at the rates of the Trump era.

      Liked by 2 people

    • peter3nj Says:

      Why the concern? Let’s see we use +/- 20 million barrels per day, we have + 400 million barrels in reserve so if driving Americans do their patriotic duty and cut driving a mere 10% per day ( work from home) (kids learn remotely) the p/p/gal should stabilize until November 9th after which Joe and Ho surrender to are enemies. Who says you can’t fool a majority of Americans all of the time?

      Liked by 1 person


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