To limit Russia’s oil revenues but keep its oil flowing to lubricate the world economy, the leaders of the Group of Seven (G7) industrialized countries is pursuing a U.S. Treasury proposal to cap the price of Russian oil. As part of sanctions imposed after Russia’s invasion of Ukraine, the European Union and the United Kingdom, which dominate the market for insurance and reinsurance of oil tankers, have agreed to bar their insurers from covering Russian oil shipments later this year, a move that could push up global oil prices. The G7 plan is to carve an exception to that insurance ban for oil that is sold below some price – one lower than the current world price for oil but higher than Russia’s cost of production. Although the proposal has gained significant support in recent weeks, it remains controversial, and some industry experts say it is unlikely to work as the proponents intend.
On Friday, September 9, the Hutchins Center at Brookings hosted Deputy U.S. Treasury Secretary Wally Adeyemo for remarks on the oil price cap proposal and how the U.S. plans to implement it.
Viewers can follow along with the conversation on Twitter using the hashtag #OilPriceCap and submit questions for the panelists at sli.do, using code #OilPriceCap.