Veteran commodities trader says ‘hard to think of a downside’ to Russian oil price cap

(Bloomberg) — Veteran commodities trader Pierre Andurand said it’s “hard to think of a downside” to a proposed oil price-cap on Russian crude that’s been floated by U.S. Treasury Secretary Janet Yellen. 

Talks are ongoing on how the US and allies might put a limit on the price of Russian oil shipments in a bid to dent revenues feeding Vladimir Putin’s war machine in Ukraine. International crude prices are up more than 50% in the past year -- and almost 20% since Russian forces rolled into Ukraine in late February. 

The wild card would be the Russian president’s reaction, Andurand said in a Twitter post: “He might decide to cut production to make international prices go up and create pain for the global economy.” 

“That depends on what Putin would decide to do. He might decide to cut production to make international prices go up and create pain for the global economy. As a result, the world might lose oil faster than with the EU embargo. But Russia’s revenues would go down very fast 4/5”

— Pierre Andurand (@AndurandPierre) June 21, 2022