Fears of Another Gas Shock Drive Biden to Seek Price Cap on Russian Oil
The Biden administration’s proposal would not affect the European ban, but it would ease some of the other restrictions — but only if the transported Russian oil is sold for no more than a price set by the United States and its allies. That would allow Moscow to continue moving oil to the rest of the world. The oil now flowing to France or Germany would go elsewhere — Central America, Africa or even China and India — and Russia would have to sell it at a discount.

Some economists and oil industry experts are skeptical that the plan will work, either as a way to reduce revenues for the Kremlin or to push down prices at the pump. They warn the plan could mostly enrich oil refiners and could be ripe for evasion by Russia and its allies. Moscow could refuse to sell at the capped price.

Treasury Secretary Janet L. Yellen plans to push for more support for the cap when she meets with fellow finance ministers from the Group of 20 nations — including Russia’s — in Asia in the next week. The American delegation will have no contact with the Russians, a Treasury official said.

But even some skeptics say that the price cap could, if nothing else, keep enough Russian oil pumping to avoid a recession-triggering price spike.

Administration officials say privately that there are signs in oil markets that even in its infant stages, the cap proposal is already helping to reassure traders that the world could avoid abruptly losing millions barrels of Russian oil per day at the year’s end.

Other administration officials have pressed the case for the cap in trans-Atlantic video calls and in-person meetings across European capitals like Brussels and London. They are stressing recession risks in talks with other countries, private insurers and a host of other officials over how to structure and carry out the price-cap plan, which leaders of the Group of 7 nations endorsed in principle this past week at a meeting in the German Alps.