Veazy: Outfoxed with oil pricing |

Veazy: Outfoxed with oil pricing

Despite economic sanctions, asset freezes, sanctioning Russian oligarchs and voluntary business withdrawals from Western countries, Russia’s petroleum industry and the Western sanction exceptions keep Moscow’s treasury cash rich, while the ruble appreciates and the G-7 and others suffer. (1) (2) (3) (4) (5) (6) (7)

The Group of Seven (G-7) decided to use U.S. Treasury Secretary Janet L. Yellen’s snake oil-like approach to nearly stop Russia’s liquidity by using a buyers’ cartel’s two-punch maximum price and denial of insurance to oil shipments policy. This entails setting a restrictive Russian petroleum price below the global oil price.

The G-7 states are Great Britain, Canada, Germany, Japan, France, Italy and the United States. Before their decision to set up a new cartel bloc plan to deal with Russia, Moscow admonished them it won’t sell to price-capping countries, and their price-cap policy would upset the world petroleum market. 

Putin had forethought the price cap tactic and searched for a solution to it.  
Let’s bear in mind that Russia cut back natural gas in the summer of 2021. This led to a rise in gas prices before any sanctions were imposed on Moscow and its oligarchs. 

Furthermore, Gazprom cut off several European states’ oil purchases when they sanctioned Russian banks, businesses and individuals. Already, China and India buy substantial Russian oil shipments, so energy analysts warn the rash action may fail without their involvement in the G-7 plan.  

Over the long run, energy intensive companies just may leave Europe, as gas cuts to worsening situations into 2023.  

Russian natural gas still continues to flow to Slovakia, Turkey and Bulgaria.  In fact, Turkey pledged to pay rubles for Russian gas and expects no energy shortages this year, even though it has an 80% annual inflation rate. Turkish President Recept Tayyip Erdogan told Europeans they caused their energy crisis by imposing sanctions on Russia.

In conclusion, Russia won’t restart the Nord Strean unless there is sanction relief. Putin gambles sky-high energy prices in the United States and Europe will weaken support for the Ukraine — for neither consumers nor businesses can stomach ever higher gas future prices.

(1) “ICYMI: The Washington Post’s Editorial Board: A Promising Plan to Stanch Russia’s Gusher of Oil Money,” Press Release, Office of Public Affairs, U.S. Department of Treasury, Sept. 5.

(2) “G-7 nations back plan to cap Russian oil prices in a bid to drain the Kremlin’s war chest,” Sam Meredith, Energy,, Sept. 2.

(3) “Russia will strike back at US-led oil price caps by shipping more crude to Asia, its energy minister says: report,” Zahra Tayeb, Business Insider India,, Sept. 6.

(4) “Russia cuts off gas supply to Europe demanding sanction relief,” Yahoo!finance, Video Transcript,, Sept. 6. 

(5)  “Explainer: Europe struggles with crisis as Russia cuts gas,” Associated Press,

(6) “Treasury Official Says Financial-Services Firms Can Help Curb Russia’s Oil Revenue,” Richard Vanderford, Risk & Compliance Journal, Wall Street Journal,, Sept. 6.

(7) “Erdogan blames Europe’s energy crisis on Russia sanctions,” Foreign, NNN News,, Sept. 6.  

Emzy Veazy III


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