- As policymakers attempt to reduce market volatility before midterm elections, the plan to limit Russian oil prices may be postponed.
- According to sources familiar with the matter, the WSJ would receive key guidance regarding the price cap after the November 8 midterms.
- This could delay the price cap proposal or reduce Russian oil flow when the EU ban completely kicks in.
Sources familiar with the matter said that the plan to limit Russian crude oil prices may be delayed because key guidance regarding the price cap’s level is expected after the US midterm elections. Wall Street JournalFriday
In an effort to preserve their sovereignty, G7 leaders are working to limit Russian crude oil prices. Russian oil flowMoscow’s war revenues, while also allowing them to trade in the spot market. The US has banned Russian oil imports. European Union bans Russian crude oilThe price cap will be fully in effect on December 5, the date Russia originally proposed it.
However, this timeframe appears less likely as officials don’t plan to set the price cap before the midterm elections on November 8, sources claimed.
Although US Treasury officials floated the idea, Possible cap of $60 per barrelOfficial details remain to be clarified, partly due to the fact that there are not yet any official announcements. Russia threatens to stop selling oilTo countries who participate in the plan. Russia following through on the plan could send energy markets through another wave volatility, potentially jeopardizing democrats’ popularity during elections, as President Biden trumpets. falling gasoline pricesHis presidency was a highlight.
Helima Croft, RBC’s commodities chief, told the Journal that a delay in the price cap could force EU to reconsider whether to enforce its full Russian oil ban. This would likely lead to Russian oil flowing less efficiently from the market. Supply shortages become more severeWinter ahead and rising prices
Already, volatility in the energy markets has been fueled by uncertainty about a price limit. Fears over how it would work are likely. OPEC+’s decision not to reduce oil production was influenced by these factorsAccording to Indonesia’s finance minister, this is about 2 million barrels per day.
Officials have provided some details about how shipping companies can adhere to the price cap plan. However, current rules seem loose. According to sources familiar with the matter, companies won’t face any punishment for facilitating Russian oil trading outside of the price cap. A US Treasury official stated previously that policymakers knew that there wasn’t a way for insurers enforce the price limit. Russia could still export between 80%-90% of its oil, this could be good news for Russia.Official alerted that the mechanism was now in place.
