The Biden administration reportedly wants to avoid market volatility ahead of midterm elections
© Getty Images/ahopueo
US officials aren’t planning to set the level of the price cap on Russian oil until after the US midterm elections on November 8, the Wall Street Journal reported on Friday, citing people familiar with the matter.
The Biden administration is concerned that an announcement of a price ceiling would lead to a cut in Russian supplies, cause oil market volatility and influence the results of the midterm elections, the WSJ explains.
Moscow repeatedly said that it wouldn’t supply oil and gas to nations that adopt trade policies contradicting the terms of existing contracts.
Initially, the level of the price cap was expected to be set by mid-October to give the industry time to prepare for December 5, when the US and its allies plan to ban businesses in their countries from shipping, financing, and insuring Russian oil, unless it’s sold below the set limit.
The delay in finalizing the details means that supply that’s already in transit on December 5 may fall under the sanctions when it arrives with the buyer.
“It’s roughly 40 days to December 5th, a typical voyage to the longer routes from Russia run 45 to 60 days. So we’re inside the window of a stranded cargo, there’s some risk that crude-oil prices could rise as buyers bid for alternative sources,” the WSJ cited Kevin Book, the managing director of ClearView Energy Partners.
The US wants to curb Moscow’s revenue but at the same time to keep Russian oil flowing to global markets. According to various estimates, the cap might be set at around $60 a barrel.
For more stories on economy & finance visit RT’s business section
