Opinion: November 24, 2022. Reason Why the Russian Oil Price Cap Might Not Work

The G7 countries have proposed a price cap to the price paid for Russian oil.This is in itself a violation of the rules of the free market, however, there are other specific reasons why it may not work.

• There are large countries such as China and India that will probably not abide by it.

• Russia will not sell its oil to countries participating in the cap.

• Measures to circumvent the sanctions will be developed by the same countries implementing the cap.

• If the cap were to succeed as a sanction to Russia, Arab countries may be the next in line when G7 countries decide what the oil price should be.

• Pressure by industries that would see a loss in revenue such as shipping industries in Greece, Malta and Cyprus

For further information, read this article

This post is intended to only raise awareness. In order to make actual financial decisions please contact your financial advisor and/or tax advisor prior to making the decision.