The US continues to advance the idea of a Russian oil price cap. The idea is that countries would refuse to permit the insurance of any ship that transports Russian oil above the price cap, which would be in the $40-60 range.
The US is pressing India and China on the idea and there are at least some signs of openness, if not traction. Initially, markets laughed off the suggestion but it continues to percolate.
The White House appears to believe that capping Russian oil prices will lower the cost of global energy but doesn't account for the potential of lost barrels. Yellen -- shockingly -- also shrugged off the potential for retaliation, which is something that G20 finance ministers stressed to her.
"Russia's going to face an insurance and financial services ban at the end of the year that is going to end up shutting in between 3 and 5 million barrels, we estimate," she said. "So why should they retaliate for an initiative that enables their oil to continue to flow through to world markets at a price that is still profitable?"
I still refuse to believe that serious people want to take out 3-5 million barrels of Russian oil as the globe faces an energy crisis, but here we are.
