A Russia price cap: Too clever by half

The proposed mechanism may cause Russia some pain, but its impact is likely overstated

What has been touted as Russian oil market resilience stems from the fact that—despite refiner self-sanctioning and bans in places such as the US, the UK and Australia on the import of Russian-origin feedstock—its crude production and exports from have largely held up… so far. In April, Russian production fell by c.1mn bl/d but swiftly recovered in May and June. In August, Russian production fell by c.2pc month-on-month, to 10.6mn bl/d, only c.4pc below its pre-war level output. And part of this decline in output is related to a fall in Russian gas production, which has had a knock-on effect on condensate output. As we move toward a planned EU ban on Russian crude in early December and produ