Biden won't take risk announcing Russian oil price cap until midterms elections: Report

Ahead of the November 8 midterms elections, the Biden administration is not in the mood to invoke a price cap on Russian oil, an American media reported on Friday. According to the reports, the administration does not want to take risks amid the falling ratings of the ruling Democratic party. Citing its sources in the US Treasury Department, The Wall Street Journal reported that the administration tries to ease industry concerns about the sanctions that the West has imposed on Moscow as a penalty for attacking its neighbouring nation, Ukraine.

Though the media report did not mention the exact date on which the Biden administration could take a call on the price cap but its sources have confirmed it would not make any changes until November 8.  Besides, it said that the negotiations on price both within the government and with allies, as well as the Organization of the Petroleum Exporting Countries (OPEC) and production cut have also contributed to the delay. Meanwhile, amid the sceptical situation and the absence of proper details have left the oil industry in a dilemma about whether Russian oil in transit on December 5 will face new sanctions requirements when it arrives at its buyer.

“It’s roughly 40 days to December 5, 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,” Kevin Book, the managing director of ClearView Energy Partners, told The WSJ. Moreover, speaking about the slow development of the price cap, he said the Biden administration knew if it invokes the price cap immediately, it might backfire during the upcoming elections. 
The announcement of the price cap would prompt Russia to threaten to cut off oil production and cause oil market volatility, Book.

Putin asserts sanctions will backfire West

Earlier in June, Russian President Vladimir Putin called the European and Western sanctions on Moscow a "mad" step as he believed this could lead the European Union to lose nearly $400 billion. While speaking at 25th St. Petersburg International Economic Forum-- an annual Russian business event for the economic sector-- which is also popularly known as "Russian Davos", Putin said the country’s economy would eventually overcome sanctions in the coming months. He emphasised that Russia has been focusing on minimising the effect of sanctions in a composed and professional manner.

Image: AP