U.S. Oil Policy in the Spotlight
Ellen R. Wald, Ph.D. | Nov 10, 2022 10:42
This week saw several important developments on the future of U.S. oil policy, production, and the price cap policy on Russian oil. Traders should be aware of how these developments are likely to impact markets.
1. U.S. Midterm Election Results/h2
Although some election results are still being tabulated, it appears as though the Republican Party won announced that their price cap will only apply to the first point of sale of Russian oil. The price cap policy denies access to U.S. and EU shipping, insurance, and banking infrastructure to parties that purchase Russian oil at a price above the price cap. The actual price cap has not yet been decided. This means that Russian crude oil can be resold globally at any price or it can be refined into products that can then be sold at any price. This makes Russian oil even more attractive to countries like India, China, Turkey, and Indonesia, who can not only continue to purchase Russian crude oil for domestic use but can potentially buy even more Russian crude and trade it on the global market or refine into products they can sell globally. If they agree to a negotiated price with Russia that is at or below the price cap, transporting that crude oil will become even easier. Of course, Russia may still decline to sell its oil at the price cap level. Until the price is announced, it is very difficult to predict what will happen when the policy goes into effect.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.