Why a Russian oil price cap is unlikely to work

The notion of a limit on Putin’s oil export revenue is attractive, but it will be virtually impossible to make it work in practice

Figures as influential as US treasury secretary Janet Yellen and IEA executive director Fatih Birol have taken up with some enthusiasm the G7’s late-June idea to pursue a ban on transporting Russian oil sold above a maximum price in response to the invasion of Ukraine. The thinking is that it would facilitate the flow of Russian crude to the market, keeping oil prices lower than under an embargo, but prevent the Putin regime from enjoying a revenue bonanza from continuing to export substantial volumes and benefitting from the price inflation of any real or feared reduction in Russian supply. From the perspective of the G7 leadership, it is as it close as it gets to having their cake and eati