Price Cap on Russian Oil Risks Crisis It’s Meant to Prevent
Treasury officials say the plan will prevent European sanctions from pushing crude prices higher. Its success could depend on Putin going along.
Russian President Vladimir Putin (left) and Chinese President Xi Jinping at the Shanghai Cooperation Organization summit in Samarkand, Uzbekistan, on Sept. 16.
Photographer: Sergei Bobylev/Sputnik/AP Photo
Something odd happened this spring as European governments prepped their sixth package of sanctions against Russia. Washington, which has spearheaded the international effort to ratchet up the pressure on Moscow as punishment for the invasion of Ukraine, looked at one portion of the plan and grew alarmed about the potential fallout. In the months since, US Treasury officials have been working frantically to create a workaround.
Make no mistake, the Biden administration isn’t concerned about inflicting too much pain on the Kremlin. It is, however, worried the European penalties could backfire, with devastating consequences for consumers and businesses in the US, Europe, and other countries already feeling the squeeze of high energy prices. In response, the US Treasury cooked up what appears to be a clever solution—though one that could lead to a dangerous showdown with Moscow.