US and allies to announce price cap on Russian oil; move will help cut Moscow’s revenues for its war machine

The United States and its allies will soon announce a price cap on Russian oil exports, as punishment for the country’s invasion of its neighbour Ukraine.

As per Reuters, the Group of Seven (G7) nations, the European Union and Australia are slated to begin implementing the price cap starting December 5th and the coalition will probably adjust the level a few times a year and not monthly.

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This cap aims to keep oil flowing to international markets and prevent price spikes while depriving Moscow of a key source of revenues for its war machine.

As per an AFP report citing a senior US Treasury official, the European Union is talking with its members about the price level. 

Once the EU’s procedure is complete, the broader coalition will take action to apply the cap.

“We expect the next few days for them to complete their consultations on price setting, and for us as a coalition to move forward … implementing the price cap ahead of December 5.” 

Moscow wouldn’t retaliate against the new policy, the official claimed, since “it’s not in their interest.”

“Any action they take to drive up prices will have an impact on their new customers, customers like India and China,” he added.

Treasury officials have insisted that the price cap would allow Russia to make a profit while preventing them from receiving additional revenue via price inflation.

(With inputs from agencies)

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