How the West’s price cap on Russian oil could roil energy markets

Ever since Russia invaded Ukraine in February, America’s energy policy has pursued two grand, seemingly contradictory aims. The first is to keep global oil supply high enough that prices remain tolerable and public support for sanctions stays strong. The second is to asphyxiate Vladimir Putin’s war machine by stemming the flow of dollars Russia earns by flogging oil barrels. Together they form a circle that is hard to square because, with supply closely tracking demand amid a dearth of new production, taking any oil off the market mechanically triggers inflation. The West has nevertheless tried to defy the law of physics by crafting a growing array of measures to meddle in oil markets.

The ones that have been deployed until now have often been piecemeal and involve uncomfortable compromises. Puncturing its own sanctions against Venezuela’s thuggish regime, on November 26th America granted permission for Chevron, a big American oil firm, to crank up its oil production there….

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