G7 Cap on Russian Oil Prices Likely to Boomerang, Hit Western Investors Hard, Experts Say
Sep 04, 2022
Washington (US), September 4: Price caps on Russian global oil exports announced by the Group of Seven (G7) major industrialized countries will likely only hurt Western investors after energy costs go soaring, analysts told Sputnik.
On Friday, the G7 finance ministers agreed to introduce a price cap for Russian oil. The price cap will take effect on December 5 for crude oil and on February 5, 2023, for refined products coming from Russia.
Over the past months, the sanctions imposed by the West on Russia in retaliation for its military operation in Ukraine sent food and energy prices soaring, triggering record-high inflation in some countries.
Former merchant banker, business analyst and economic historian Martin Hutchinson said the G7 oil price cap will have the same counterproductive impact as previous sanctions on Russia.
He also argued that resulting price rises from the oil cap will end up compensating for volume declines.
Moreover, he added, the G7 states have no control over the policies of heavy oil consumers like China and India, nor the major energy producers of the Middle East.
Independent Institute Center for Peace & Liberty Director Ivan Eland, recalling how previous government attempts to artificially influence global markets failed disastrously, said "price controls never work."
Source: Sputnik
