The unknowns China and India
The major unknown that weighs on the plan and its repercussions, alongside the precise price cap, is its global hold, starting with the attitude of large third countries such as India and China. They have so far avoided supporting sanctions against Moscow and have actually increased purchases of discounted Russian oil since the conflict in Ukraine in the country’s climate of isolation. With the Kremlin, which despite the decline in export volumes, thanks to the increase in prices, saw the value of crude oil exports increase between May and June by 700 million dollars, to over 20 billion.
The case of India is emblematic. Before the Russian invasion of Ukraine, its import of Russian crude oil was close to zero. In July, however, it rose to one million barrels per day.
The EU needs unanimity
The G7 financial statement underlines that the new measure “broadens the range of action of existing sanctions, in particular the sixth EU package”. In a reference, however, to the complexities of European politics itself, the G7 “recognizes that, for the EU, the unanimity of the 27 member countries is necessary”. The take-off of the price cap should be “aligned” with the timing of the latest EU package, which is planning to embargo Russian crude from 5 December.
For Yellen, the price cap, as well as being an essential weapon to deal with Putin’s aggression, is “one of the most powerful tools to fight inflation”. Paolo Gentiloni, EU commissioner for economic affairs, said the decision is an “important step towards two objectives: denying Russia the revenue to finance Putin’s brutal war against Ukraine and creating pressure for a fall in global prices. ‘power”.