The Intelligence from The Economist The for-sixty-dollar question: a cap on Russian oil
Dec 5, 2022
Rachana Shanbog, Deputy Business Affairs Editor at The Economist, discusses the implications of the $60 price cap on Russian oil, exploring potential production cuts and geopolitical tensions. Kinley Salmon, Africa Correspondent, highlights Senegal's acclaimed Generation Foot football academy and how it continues to nurture talent for future successes, despite the national team's recent World Cup exit. The conversation also touches on the peculiar challenges of sourcing everyday items like deodorant in New York City, bringing a quirky twist to current events.
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Price Cap on Russian Oil
- The G7 and EU implemented a $60 per barrel price cap on Russian oil to limit Russia's war funding.
- This cap is controversial, with some criticizing it as insufficient and others fearing market instability.
Targeting Insurers
- The price cap targets European insurers and shipping firms due to their significant market power.
- This strategy aims to reduce Russia's oil earnings without causing a global oil price spike.
Setting the Price Cap
- Setting the price cap involved balancing punishing Russia and avoiding excessive harm to Western consumers.
- The $60 per barrel cap reflects the current market price of Russian crude, aiming to incentivize continued Russian oil production.