Capping of the Russian Oil

 Group of Seven finance ministers will hold talks this week on allowing global purchases of Russian oil at a capped price with the US hoping to ease energy market pressures and slash overall Russian revenues from crude. The European Union, UK and Switzerland all plan to ban their companies from providing those services for Russian oil shipments beginning in December.

Causes: With the decades of high inflation in Europe and the USA due to oil prices and basic consumer utilities, this was bound to happen. By setting a "Price Cap" the US expects nations other than the European Union to also follow them by buying oil from other OPEC resources. This is explained by the following flowchart.

--> Price Cap imposed.

--> Countries in the EU start to buy Russian oil if sold at that price cap.

--> If not then, other African Nations or OPEC will provide OIL.

--> The countries supporting Russian oil are forced to buy Oil at a higher price as Russia won't stop its profits.

--> Hence the eventual shift of buying from Russia to other countries.


Effects: The effects of this condition are delicate. They might go in favour of the Superpower's wishes or could even fire back with the OPEC giving out the decision to Over-ride the decision and stop supplying oil at even the current rates to the world and increase the prices. Already the King of Saud was unhappy regarding the lowering of prices in the current scenario. This could just add fire to the fuel.

What does this mean for you: As soon as developments unfold, it would be clear soon enough where in which countries should our money be put for maximum gains.

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