BRIEF COMMENTS ON PRICE CAPS FOR RUSSIAN CRUDE OIL AND NATURAL GAS ESTABLISHED BY G-7 AND EU

Petre Prisecaru

Euroinfo, 2022, vol. 6, issue 4, 86-97

Abstract: The idea of establishing a price cap for Russian oil was launched by US Treasury Secretary Janet Yellen in June 2022 and after several months of debate the G7 member states agreed to adopt it towards the end of October, while on September 7, 2022 the president of the European Commission Ursula von der Leyen, announced that the European Commission will also propose a price cap for Russian gas. After this announcement Russian President Vladimir Putin has made it clear that Russia will not sell oil and gas to countries that impose a price cap. On October 18 the European Commission proposed a new emergency regulation to tackle high gas prices in the EU and ensure security of supply this winter, and on November 22 has proposed measures to cap gas prices through a correction mechanism, a safety cap for gas prices, and safeguarding measures aimed at guaranteeing security of supply and market stability. In this context,our article analyzes the impact of these decisions on energy security in the EU, highlighting the main risks, but also the response mechanisms of the European authorities.

Keywords: price cap; G7; EU; supply security; market stability; market correction mechanism (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:iem:eurinf:v:6:y:2022:i:4:p:86-97

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