Crude oil cap not the right way forward: China Daily editorial

Will the $60-per-barrel price cap on Russian crude oil work as European Union countries and Washington expect?

They hope that the cap will restrict Russia's primary source of revenue for its special military operation in Ukraine, while simultaneously preserving the stability of global energy supplies.

A scheme of the US administration, which conceived of the price cap as a way to relax Europe's original plan to completely ban the insurance and financing of Russian oil shipments, will not necessarily work as the Joe Biden administration expects.

Russia could and will very likely refuse to sell its crude oil under the cap. Large buyers of Russian oil may not respect the Western rules and the private sector will struggle to comply with new requirements.

Russia has large buyers of its crude oil besides EU countries and it will not be difficult for Russia to defy the cap and refuse to sell its crude under the cap. It is quite likely the stability of the global energy market will be disrupted rather than Russia's own revenue as a result.

The fact that Washington talked EU countries into accepting this cap rather than one at a much lower price points to its own concerns that a full ban could jeopardize global oil markets and send crude oil prices as high as $140 a barrel. Which would undoubtedly lead to a new surge in energy prices and further fuel inflation.

Any surge in oil prices and inflation would have an impact on the well-being of people in European countries and the United States. For residents in EU countries on whose life the conflict between Russia and Ukraine has already taken a toll, the cap will only make things even more difficult.

Whatever happens after the cap takes effect, EU countries will hardly benefit and people in the EU will continue to suffer; so will people in the US as it is only wishful thinking that Russia will do as Washington expects.

Washington continues to provide military aid to Ukraine as it wants the hostilities to last, from which it hopes to further benefit. But the longer the conflict lasts, the more lives will be lost on both sides, and the more people in EU countries will suffer. The war will also continue to plague the development of the global economy.

For the well-being of people in both Ukraine and Russia, for a better life for people in EU countries and for the recovery of the global economy, efforts should be made on the part of EU countries and the US to strive for an end of the war through talks. That is the right way forward.