While Western countries try to use their insurance firms and vast maritime fleets as leverage to force the Kremlin’s hand, Russian cargoes could find alternative suppliers to replace the banned services.

This makes the G7’s success contingent upon the participation of non-Western countries, including Russia’s top clients: India and China. The EU is still awaiting the cap’s precise details before giving its final green light. 

“Washington’s ability to cobble a broad coalition in implementing the price cap, particularly to include countries with major shipping industries such as Panama and Liberia, and secure explicit or tacit participation from some big Russian oil buyers led by India will be key signposts for the EU’s willingness to fully back the plan,” said a group of analysts at the Eurasia Group, a risk consultancy.

The US Treasury has estimated that capping the price of Russian oil at the international level would result in $160 billion (€165 billion) in annual savings for the 50 largest emerging economies, something that might entice other countries to throw their support behind the G7 initiative.

But if the cap triggers unintended consequences, such as onerous obstacles for maritime transport, sudden price shocks or a widespread shortage of supplies, the G7 could make more enemies than allies. Beijing has said oil is a “vitally important” global commodity that should not be put at risk.

“It is very optimistic to believe this [price cap] can work,” Ben McWilliams said. 

“In fact, I don’t believe even the architects think it will work perfectly. They just prefer a ‘leaky system’ in which Russia can still make some profit above the cap rather than a scenario in which Russia is completely forced off market.”

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