Here is what to know about the price cap, the EU embargo and what they could mean for consumers and the global economy:
A $60 cap would not have much impact on Russia’s finances, said Simone Tagliapietra, an energy policy expert at the Bruegel think tank in Brussels. That “will almost go unnoticed,” he said, because it would be near where Russian oil is already selling.
“The cap might be lowered over time if we want to increase the pressure on Russian President Vladimir Putin,” he said. “The problem is: We have already spent a lot of months waiting for a measure to dent” Putin’s oil profits.A cap as low as $50 would cut into Russia’s earnings and make it impossible for Russia to balance its state budget, with Moscow believed to require around $60 to $70 per barrel to do that, its so-called “fiscal break-even.
With Monday’s deadline looming, there isn't “much time to parse out this disagreement for much longer,” she said, adding that “$60 is better than not agreeing at all. They can obviously revise it later on to reflect conditions on the market ... and tighten it.”What if Russia and other countries won’t go along?
Russia also could sell oil off the books by using “dark fleet” tankers with obscure ownership, as have Venezuela and Iran. Oil could be transferred from one ship to another and mixed with oil of similar quality to disguise its origin. “You need to tap into this dark fleet, and it’s not limitless,” she said. “Iran and Venezuela are using it, rather effectively, but you might face competition with the same targets. ... This cat-and-mouse game is always inherent in sanctions mechanisms.”What about the EU embargo?
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