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Local media uncertain about viability of proposed price caps on Russian oil

  • June 29, 2022
  • , Asahi, Mainichi, Yomiuri, Nikkei
  • JMH Summary

All national papers other than Sankei highlighted the G7 agreement on exploring ways to impose price caps on Russian petroleum in an attempt to limit Moscow’s ability to finance its war in Ukraine, wondering whether it is possible to establish a viable mechanism. According to Asahi, an unnamed senior GOJ official voiced skepticism by saying: “Russia probably will not sell oil at a price set by the G7 and their partners.” He was reportedly worried that the proposal may do more harm than good because Russia might decide to reduce its oil exports in retaliation for the imposition of price caps, which would propel a further rise in market prices. Projecting that global petroleum prices may increase if emerging nations choose to reach out to alternative suppliers, such as oil producers in the Middle East, Yomiuri opined that obtaining cooperation from China, India, and other emerging economies will hold the key to devising a workable scheme. Nikkei pointed out that European shipping agents have already reacted strongly to the idea of using shipping insurance to put price caps on Russian products. The business daily also noted that lowering oil prices artificially would end up encouraging the consumption of fossil fuels and aggravating global warming.

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