Russia’s War Machine Revs Up as the West’s Plan to Cap Oil Revenues Sputters
The United States and its allies in the Group of 7 nations set two goals in 2022 when they enacted a novel plan to cap the price of Russian oil: restrict Moscow’s ability to profit from its energy exports while allowing its oil to continue flowing on international markets to prevent a global price shock.
. . .
A variety of factors have allowed Russia to continue profiting from strong oil revenue, including lenient enforcement of the price cap. Russia’s development of an extensive “shadow” fleet of tankers has allowed it to largely circumvent that policy. That has allowed the Russian economy to be more resilient than expected, raising questions about the effectiveness of the coordinated sanctions campaign employed by the G7.
The Biden administration maintains that the strategy has been effective and that the price cap has imposed costs on Russia and forced it to redirect money that it would have used in Ukraine to finance an alternative oil ecosystem.
