Impress upon the West the futility of its oil cap3 min read . Updated: 05 Dec 2022, 11:29 PM IST
The West’s latest attempt to squeeze Russia’s earnings is just as futile as its other sanctions. India should initiate talks on a global treaty aimed at barring the weaponization of trade
It was like a ship cruising along quietly at night, with barely a ripple across the global market for crude oil. On Monday, a much-hyped price cap of $60 per barrel on Russian oil shipments took effect. Imposed by a pact forged among the G7 countries, the EU and Australia (the US-led West, broadly), the complexity of this sanctions package is matched only by its futility. The EU has barred seaborne imports from Russia, even as European and British companies can no longer insure, trade or ship Russian supplies to non-EU countries like India unless the oil to be shipped is bought below that price. The proposal of a cap has been in the air since May, when the West began working on ways to squeeze Russia’s oil revenues to starve its war in Ukraine of funds. Its imposition put Opec+ in wait-and-watch mode, with the oil cartel reported to have kept its quota allotments on hold to first gauge the cap’s market impact. But price volatility stayed muted on Monday, with a slight hardening in early trading better attributed to an easing of China’s covid curbs amid a scenario of world demand softened by a broad economic slump. Moscow rejected the cap, of course, but has no cause for panic. New Delhi, too, can keep calm and carry on.
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