Day 283: G7, Australia Agree to Price Cap on Russian Oil

    Photo: TASS [via TASS]

    The Facts

    • Countries from the G7 and Australia agreed to join an EU proposal to cap the price of Russian oil exports at $60-per-barrel on Friday.

    • The move, set to go into effect on Dec. 5, is aimed at limiting the funds available to Russian Pres. Vladimir Putin and his country's war in Ukraine. US Treasury Secretary Janet Yellen said the agreement will help restrict Putin’s "primary source of revenue for his illegal war in Ukraine while simultaneously preserving the stability of global energy supplies."

    The Spin

    Pro-establishment narrative

    The benefits of this agreement are two-fold: A cap on Russia's oil exports will further strain the resources available to Moscow for fighting its war in Ukraine while alleviating price instability if Russian oil is taken off the market.

    Establishment-critical narrative

    With countries such as China, India, and others unlikely to go along with the EU's proposal, it's highly unlikely that it will be successfully implemented or work. A price cap is a ridiculous idea.

    Pro-Russia narrative

    Not only does a cap on the price of Russian oil — which will hardly make a dent in Putin's profits — go against the principles of international trade and have grave consequences for the global energy market, but it also paves the way for setting price caps in other sectors.

    Nerd narrative

    There's a 50% chance that the price of oil will be at least $86.8 per barrel by the end of December 2022, according to the Metaculus prediction community.

    Establishment split



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