As the war in Ukraine drags on, the European Union is picking up arms against Vladimir Putin and his Russian army. Although not using traditional weapons such as tanks, guns, and missiles, the EU is hoping that weaponizing trade and capping the price of oil will aid Ukraine in winning the war before the cold harshness of winter sets in. So far, the jury is still out on whether this move will make an impact on the economy or on Vladimir Putin’s behavior with Ukraine.
A Decision Rendered
Earlier in the year, the United States and its Western allies agreed that they would create a price cap for oil, hitting Russia where it hurts in the hopes to stop the war. They also agreed to decide on the details by early December, though getting to the actual number has proven difficult, with Poland holding out until just this week.
The president of the EU, Ursula von der Leyen, said “Today, the European Union, the G7 and other global partners have agreed to introduce a global price cap on seaborne oil from Russia.” The EU hopes that this move will decrease Moscow’s bottom line while also balancing energy markets so EU-based operators can export the oil to third-party countries, as long as it is still priced below the cap. It will also fortify the Russian sanctions.
