An unexpected argument against the US idea to limit the price of Russian oil was made by Martin Sandbu, a columnist at the Financial Times. He believes that Biden' proposal to impose a price cap on Russian oil highlights the reliance of Western countries on Moscow. Notably, the United States does not import energy from Russia.
According to Sandbu, White House officials' initiative to create a price-capping mechanism on Russian oil exports is a bad idea. In addition to the fact that it shows the West's dependence on the country’s energy, this measure could affect the market equilibrium, he noted. "At the time of writing, those who buy and sell oil for a living are pricing Brent crude at about $98 today and about $90 for December or January delivery," the report says.
Thus, sellers and buyers “either disagree with the US government that the EU sanctions will matter for the global oil market or, more likely, they have already priced in the effects,” Sandbu stated. “As I have argued in the past, we should not try to contain market-clearing energy prices. Instead, we should help those truly in need, while letting the incentives to economize on energy use work. <...> Capping the oil price would reverse all the incentives for this. And it would do harm beyond the immediate crisis,” he stressed.
Earlier, the columnist said that at the last G7 summit, the United States had browbeaten the European Union into capping the price of Russian oil. However, such a step would hardly reduce Moscow's revenues, he added.
