Todays Connections Hints and Answers for November 22

A coalition of nations, including the G7, the European Union, and Australia, has finalized a policy to cap the price of seaborne Russian crude oil. The measure is designed to limit Russia’s revenue from oil exports while keeping supplies flowing on the global market. The policy is set to take effect in early December, alongside the EU’s broader embargo on Russian crude oil.

Main News

The price for Russian seaborne crude oil has been set at $60 per barrel. This cap will be enforced by prohibiting shipping, insurance, and trade financing for Russian oil sold above the set price. These services are predominantly provided by companies within the coalition nations.

The agreement was reached after extensive negotiations, with the European Union requiring unanimous approval from its 27 member states. Poland gave its final approval, allowing the policy to proceed. The cap will be reviewed every two months to ensure it remains appropriate.

The goal of the measure is to reduce the funds Russia earns from its oil to finance its military operations. Simultaneously, the policy aims to prevent a sharp rise in global oil prices by maintaining Russian oil on the market, just at a lower price point.

Summary

A group of major economies has agreed to implement a $60 per barrel price cap on Russian seaborne oil. The policy uses Western-controlled insurance and shipping services as leverage.

The cap is designed to curtail Russian oil revenue without causing a supply shock that would increase global prices. It will be enacted in parallel with a European Union embargo on most Russian crude oil imports.

The agreement followed prolonged discussions and was finalized after Poland, the last holdout, consented to the deal. The level of the price cap will be subject to regular reassessment going forward.

FAQs

**What is the Russian oil price cap?**
It is a policy by the G7, EU, and Australia to set a maximum price for purchasing seaborne Russian crude oil. The cap is set at $60 per barrel and is enforced by restricting key services like insurance for shipments sold above that price.

How does the price cap work?
It prohibits companies within the coalition from providing shipping, insurance, and financing for the maritime transport of Russian oil if the purchase price exceeds the cap. This makes it difficult for Russia to sell oil above the set price to many global customers.

When does the oil price cap begin?
The price cap is scheduled to take effect on December 5th, 2022. This is the same date the European Union’s full embargo on most seaborne Russian crude oil imports begins.

Disclaimer: This report is for informational purposes only and does not constitute financial advice. All information is based on verified reporting available at the time of publication.