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The price cap is just another move for domestic consumption as the political West desperately tries to pretend it’s still in control.
Written by Drago Bosnic, independent geopolitical and military analyst
Last Monday, US Treasury Secretary Janet Yellen stated the United States and other NATO/EU countries are continuing talks to “restrict Russia’s energy revenues” by “imposing a price cap” on the country’s oil.
“We are continuing to have productive conversations, today and with our partners and allies around the world with how to further restrict energy revenues to Russia while preventing spillover effects to the global economy,” Yellen said during a press conference. “We are talking about price caps or a price exception…”
The US, Canada, the UK and other satellite states have banned Russian oil imports, while the EU, which remains highly dependent on Russian energy supplies, agreed on a partial ban by year’s end. The G7 countries, the largest Western and Western-aligned economies, have agreed to “study possible price caps” on Russian oil and gas to try to “limit Moscow’s ability to fund its invasion of Ukraine”, G7 officials said on Tuesday. The change of wording is quite telling, as just a week prior, Western political leadership was talking about the price cap as if it was already a done deal. However, at the G7 meeting, the officials were talking about “an agreement to study the Russian oil and gas price cap”. The officials, again, including US Treasury Secretary Janet Yellen, are claiming the move will reduce the revenues Russia is making with energy sales, while allowing Western consumers to continue getting oil and gas supplies.
This claim is extremely farfetched, to say the least. The very idea of caps in international trade goes against the most basic principles of free trade and market economy, both of which are (or at least they officially were) the holy grail of the political West’s economic system. The US and its allies, along with numerous client states have even gone to war with pretexts to establish “free trade” and “market economy” in certain countries, including Yugoslavia, which had a mixed (market and planned) economy. Apart from the political West quite literally destroying and dismantling the country, it also forced the shattered remains of Yugoslavia to renounce entire sectors of their economy and effectively surrender it to Western oligarchs. Essentially, by introducing an oil and gas price cap, the political West is trying to implement the same economic policies it used as an excuse to bomb and destroy numerous other countries.
Another important note is that these impotent attempts are still a far cry from the pompously announced all-out Russian export ban from approximately 4 months ago. Had the political West been able to limit or halt Russian revenues from oil, gas, food and numerous other commodities which are as essential as they could possibly be, they would’ve done it long ago. However, the political West realizes that any serious disruptions to Russian commodities reaching their own countries would have a disastrous effect on the stability of their economies. At the same time, the political West is frustrated that it needs to pay for those commodities. This results in a series of schizophrenic moves or comically arrogant proclamations of future moves which never really happen.
The declared aim is to “encourage sales of Russian oil at levels slightly above production costs to ensure Russia’s earnings are reduced while it maintains production”. Tamas Varga from oil broker PVM stated the gas and oil price cap idea amounts to evidence that outright bans on Russian commodities have been “counterproductive as Russian revenues have increased”. And indeed, Russia’s revenues from gas and oil sales have increased exponentially in comparison to the same period last year. Thus, Varga believes that “creating a buyers’ cartel to starve Russia of petrodollars while alleviating inflationary pressure from oil prices is challenging”.
“The big unknown is Vladimir Putin’s reaction,” said Varga. “If Russian President Vladimir Putin decides to reduce oil or gas exports the plan will backfire and lead to further rise in prices. It is a nightmare scenario,” Varga added.
According to Reuters, Russian production costs are $3-$4 per barrel and Russian firms could probably profit even if oil prices were $25-$30 per barrel. The goal of this Western “buyers’ cartel” is to impose a price cap which would be just above the production cost, making it possible for the oil companies to continue to operate, which should prevent the Russian government from getting any profits. Richard Mallinson from Energy Aspects confirmed this was the goal in his statement for Reuters.
“G7 countries want to reduce Russian oil revenues and this implies a price cap well below what buyers are currently paying. Some campaigners advocate for a very aggressive reduction, pointing to Russia’s low production costs and arguing it would continue to sell oil at any price above this level,” Mallinson stated.
There’s only one “tiny” issue with this plan. Russia can simply cut gas and oil supplies to all countries trying to impose this illegal Western price cap. This would push global markets into yet another frenzy. With OPEC countries openly stating they can’t replace Russia’s share in the oil and gas market, the prices would go into orbit, causing a cascading effect of price hikes in every other industry, exponentially increasing inflation, while stagnation would turn into recession in many countries. Thus, any attempt to impose price caps isn’t just illegal, but could easily backfire and destroy Western economies. It seems the political West learned nothing from the last 4 months of a failed economic siege of Russia.
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“Last Monday, US Treasury Secretary Janet Yellen stated the United States and other NATO/EU countries are continuing talks to “restrict Russia’s energy revenues” by “imposing a price cap” on the country’s oil.”…
NOT ONLY is it illegal for an ex-Federal Reserve Chairman to become a Treasury Secretary… But to speak in terms of foreign policy outside of internal domestic economic policy and the “health” of the currency to the U.S. economy is unprecedented.
In layman’s terms it’s a blatant and overt act of TREASON. But you already knew that!
Makes sense because Jews have an ethnic hatred of Russia.
It’s nothing personal against Russia. The Western European Yid$ just wants to capitalize on the sacrifice$ they have made in the deliberate fraud of setting the price for commodities -especially (precious metals) and oil and gas that has destroyed their respective economies by doing so… The Russian Central Bank made a killing on the BOE/Federal Reserve “setting the price” on said commodities -now they want their ROI which is why NATO has been omnipresent with visitation as the neighbor by “proxy” since 2014!…
While Russia is certainly not at fault for the reckless behavior and stupidity of the Western CB establishment in their approach, they had a duty to decouple from that partnership and build equity in their own commodities trading markets to make foreign investors come to them as the defacto standard better than 14 years ago -but they have NOT done so!…
With that said… Hope “Pootie Poot” is doing everything in his “power” to rid the Russian Central Bank of it’s Fifth Column -starting with Elvira “at the top”!…
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Hysteria in the west is pushing the western leaders to act like children, if the US believes that the G7 can cap prices on anything in their own countries, they are dreaming if they think to cap products in another country, especially oi, that most of it is sold to China and India. the G7 countries banned the import of oil from Russia, yet Russia is selling more than ever. Russia is not Iran, as any attempt to seize a Russian tanker would result in a declaration of war on that country.
All that Russia needs to do in reply is-cut-OFF the supply completely and then sky-high prices-recession.
Obviously, even a child can see that such a policy will lead directly to an end of sales to those countries demanding the price cut. Which leads to the only possible conclusion… Western elites are deliberately planning to impoverish their own populations, not Russia. Ukraine is merely the pretext. The goal is seemingly a neofeudal West run by oligarchs. But even that is delusional, since people in the West will simply rise up long before such a plan can be pulled off. Clearly, Western elites have succumb to a delusional Jonestown power cult, which is leading to their own self-destruction.
DIG YOUR OWN OIL DESPERATE NAZI PARASITES,G7 DON’T RULE THE FREE WORLD 6+ BILLION DO ASSWHOLES!
THE REST OF THE WORLD WILL PISS IN USA TERRORISM !!!! and THEIR STUPID BLAH BLAH BLAH PEDO TERRORISTS FRIENDS !!!!
BY THE PICTURE ITS ONLY CRIMINALS WHO SHOULD BE HANG !!!!!!!
And these people lead the West. Bunch of nuffies.
NWO backslapping hasn’t got them very far. The best this shower of shit will produce is more rhetoric and failed policies. The worst that can happen is this shower will alienate themselves from most of the free world and its free trade. The NWO and its parasites will run around like tinpot generals, ignored by most of the world and its people.
Revolution is close at hand in all their countries, and they know it.
Yeah because the U.S. govt does such a great job of managing U.S. oil production. The global hegemon doesn’t believe it is a hegemon :-) I’m waiting for Yellen to demand payment in dollars into banks under our control so that we can control how much money Russia is allowed to use (talk about being a bully).
The officials, again, including US Treasury Secretary Janet Yellen, are claiming the move will reduce the revenues Russia is making with energy sales, while allowing Western consumers to continue getting oil and gas supplies.
It means the NATO states failed in imposing sanctions on Russia. LOL
Bei jeder dummen Sanktionsidee dieser EU Staatsterroristen sollte die RF sofort den Energieexport um 10% kürzen. Nach der 10. Dummheit ist hier finster… Nur so werden die Sanktionsfetischisten klug..
our lgbt amerikan thinking is admired by all penguins
“According to Reuters, Russian production costs are $3-$4 per barrel”
“Reuter’s” analysts are delusional. ~5 dollars is cost of production in Arabian peninsula, their oil is light and not far from surface, easy to extract. Same was in Baku with oil fountains 100 years ago, no need to drill much, just install a pump. Cost of production in Russia is ~15 dollars, because oil reservoirs are placed in taiga (sub-arctic forests) and arctic planes. New deposits are opened in Arctic — Yamal peninsula and nearby sea, hundreds kilometres before large cities, there is no infrastructure at all. Persian gulf shores is the place where people are living for thousands years, especially in Tigris and Euphrates basin.
Here is another quote from “Reuter’s”: “The cost of oil production in Russia ranges from $9 to $20 per barrel, depending on the project.” (vice-minister of energy of the Russian Federation Pavel Sorokin)
The G7 are nuts if they think Putin will agree to sell oil at just above production costs with no profit. He would cut them off first and not sell at all. Russias customers are getting good discounts on the international market price so why would they want to jeopardise losing that.
The fact is that Russia has anyway been forced to sell its oil 32-33% cheaper than that of Brent Crude. Huge blow. It means that Russia is earning daily 300 million euros less than with normal global price. Losses are annually 110 billion. Gulf nations are making huge profits, Russia just moderate.
Idaho moron hillbilly–Russia historic revenues
Russia collapsed 1917, Soviet Union 1991. It’s likely that Russia will collapse also in 2020s and become China’s vassal and gas station. Real pariah nation.
moron tranny oklihoma hillbilly very stupid 1917 great victory ; 1991 even larger victory for Russia
The US is desperate, they talked the EU into following a sanction strategy that isn’t just failing, it has failed. When this is over, it will have forced Russia to take ALL of the Ukraine and the EU will be doubly in need of Russian exports.
Next part of “Dumb and dumber”. The clown of London looks like one of two main actors of that movie. They should invite german and austrian officials who proposed to eat less meat, to wash your body less, colder water in public pools and to make home temperature not higher than +18C (64,5F) at winter to strike hard on Putin. Just imagine if all their “smart” advises are realized! Putin will go off Kremlin at the next day, ha-ha-ha.
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Why does the word “Valkyrie” keep coming up in my mind?
western oligarchy produces 8 moron leaders, boorish, incompetent, impotent
angloshere—EU isolated ostracized decayed dying nations—failing in debt….Russia vast reserves, historic revenue, best most numerous nukes, defense, delivery system…Russia is self sufficient; Usa only produces toilet paper and condoms—
Price cap…LOL. These morons are all scumbag grifter grads of some law school or other because the math was too hard for an econ degree.
First they had Greenspam that almost single handedly destroyed western capitalism in 2008, now we have Old Yeller, who wants to finish the job, while Congress looks on and says, “gee, don’t understand the math but it sounds like a plan.”
GO AHEAD AND DO IT WESTERN NATIONS and see your economies which are on the brink of ruin now collapse overnight and IMPLODE, Russia holds ALL THE CARDS and the stupid idiotic Western nations still think they are relevant on the world stage, the USA power ceased to exist when Russia broke the USA dollar when they made all those western countries pay for gas in Rubles now the USA dollar is weak and getting weaker by the day, the power of the USA dollar is long gone and will never return, because at the end of the day the USA dollar is paper and that is it, where as the Ruble is backed by GOLD. = Z =
When the west wakes from the drunken binge of power politics, the hangover will be brutal.