Commentary
There are many mistakes in the G7 agreement to put a cap on Russian oil. The first one is that it doesn’t hurt Russia at all. The agreed cap, at $60 a barrel, is higher than the current Urals price, above the five-year average of the quoted price, and higher than Rosneft’s average netback price.
According to Reuters, “The G7 price cap will allow non-EU countries to continue importing seaborne Russian crude oil, but it will prohibit shipping, insurance, and re-insurance companies from handling cargoes of Russian crude around the globe, unless it is sold for less than the price cap.”…