Biden's Team Said To Be Reworking Russian Oil Price Cap Plan On Mounting Skepticism, Few Commitments

Led by investor skepticism and burgeoning risk in the financial markets driven by crude oil price volatility and central banks’ actions to tame inflation, President Joe Biden's team members are considering reworking a plan to cap Russian oil prices, reported Bloomberg.

The U.S. and European Union may settle for a loosely managed cap at a higher price, with just the Group of Seven nations and Australia committed to abiding by it, the report said, citing sources.

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South Korea has privately intimated to G-7 nations that it intends to comply, but it’s apparent that India and China — Russia’s most important trade partners — will not participate, according to the report. G-7 officials are looking to get New Zealand and Norway on board as well, it said.

The Plan: Under the earlier plan, which was spearheaded by Treasury Secretary Janet Yellen, a price cap in the range of $40 to $60 per barrel was targeted, with some officials wanting to keep the limit as close to the lower end as possible. 

However, officials involved in the plans are now talking about a cap at the higher end of that range, the report said.

“The White House and the administration are staying the course on implementing an effective, strong price cap on Russian oil in coordination with the G-7 and other partners,” the report quoted Adrienne Watson, a spokeswoman for the White House’s National Security Council.

Oil prices rose over 3% on Wednesday boosted by record U.S. exports. The United States Brent Oil Fund (NYSE: BNO) closed 3.13% higher while the Vanguard Energy Index Fund ETF (NYSE: VDE) closed 1.46% higher.

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