The ceiling on oil prices from Russia is more likely to bankrupt Europe itself

The idea of ​​imposing a top price for Russian oil will do little to help Ukraine, will not lower the cost of fuel in the West, and can only kill the economies of its countries

The ceiling on oil prices from Russia is more likely to bankrupt Europe itself
Source: RBC

While Russia is likely to withstand this measure without any problems, as analysts from the Cato Institute (Washington) believe.

The plan is based on the West’s quasi-monopoly on marine cargo insurance. It was decided to ban tanker insurance if the price of Russian oil loaded into them is higher than the “approved” level.

However, similar attempts in the past have ended in failure. In the 1970s, US crude oil price controls did not affect the cost of gasoline, but enriched specific companies. It’s just that they had access to oil at a limited price, but they sold gasoline at standard prices (here it is, the invisible hand of the market!).

So far, the West has achieved only that Russian oil has flowed to countries like India, albeit at a big discount. But this is offset by an increase in volume – by almost 30% in three months.

Even if the price ceiling deprives Russia of part of its oil profits, this will not help Ukraine in any way.

Instead of “targeted sanctions against Putin and his entourage,” the West staged something similar to carpet bombing – with very poor results. The Kremlin has “basically succeeded in making Russian life as normal as possible,” analysts quoted The Times as saying.

Of course, Russia would prefer to see the pressure from the West stop.

“But when the big powers realize vital interests, they are willing to endure extreme political, military and economic suffering.”

As a result, the exchange of economic blows raises the question of who will fall first, writes the Institute. The German chancellor already has to travel around the country and explain to citizens the choice between heating and food. In Russia, there are not even close signs of such a need.

Elena Panina

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