The Russian price cap myth

It is time to stop pretending that there is a ‘price cap’ on Russian petroleum exports

The Russian oil price cap was always unlikely to work in practice. Since oil trade is normally concluded weeks before oil is shipped, and priced against one of the benchmarks (such as Brent and Dubai in case of crude), it is impossible to tell whether the contracted price (for example, Brent Dated minus $10/bl for crude oil, or gas oil futures settlement minus $10/t for diesel) is below or above the price cap. The cap is set at $60/bl for crude oil, $100/bl for high-value products such as diesel and gasoline, and $45/bl for lower-value products such as fuel oil. As a result, the trade in Russian oil and products has continued in ways typical of commerce carried out under partial prohibition—