Plans to punish Russia through price cap on oil could backfire

Oil treatment facilities at Vankorskoye oil field owned by Rosneft north of Krasnoyarsk, Russia, March 25, 2015. [Reuters]

The US and Europe have responded to the Russian invasion of Ukraine with financial and military aid to Ukraine and economic sanctions against Russia.

Russia derives most of its export from oil and gas sales. The US has put an embargo on all oil and gas imports from Russia. Europe has implemented a partial ban, intending to halt all oil imports by the sea at the end of 2022 and gradually reduce gas imports.