“It is, in economic speak, ‘incentive compatible,'” said Adam Posen, president of the Peterson Institute for International Economics, describing the idea. In theory, even China and India - which have both ramped up oil imports from Russia - would go along, given the threat of cutting off the tankers and the benefit they’ll get from cheaper oil. Under the proposal, which is still being negotiated, importers that abide by the price cap would receive an exception from sanctions to keep buying oil, while companies that don’t would face restrictions on shipping-related services such as trade financing and insurance. maritime shipping insurance industry, for example, controls roughly 85 to 90 percent of the global insurance market.) How would it work? Shipping oil out of Russia requires a tanker, financing and insurance - services that are largely controlled by the U.S. “If you merely try to reduce flows and not reduce price, you have certain impacts on the energy market that are averse, whereas if you reduce price - if you focus on price more than flows, you might be able to actually maximize your overall objectives of both depriving revenues to Putin and keeping energy market stable,” White House National Security Adviser Jake Sullivan told reporters in Germany. By allowing Russia to continue selling, but capping the price buyers will pay, the proposal would significantly undercut Kremlin revenue and preserve global oil flows, the thinking goes. Treasury Secretary Janet Yellen has been a key proponent of the idea, which is seen as an important alternative to an outright ban on Russian oil sales that would curtail global supply and send prices sharply higher. Now, global leaders are nearing an agreement on another novel tool to crimp Putin’s profits - a cap on the price of Russian oil exports. Ī Russian missile strike on a shopping center in central Ukraine Monday provided a stark reminder for G-7 leaders gathered in Germany: Vladimir Putin’s war machine has not been deterred.įour months after Russia’s invasion began, soaring energy prices have softened the blow from Western sanctions and provided essential revenue the Kremlin needs to keep the war going.
5POINTS MIST SEE FINANCE DISTRICT PRO
The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories.
5POINTS MIST SEE FINANCE DISTRICT FREE
Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m.
0 kommentar(er)
