WASHINGTON (Pakistan Point News / Sputnik - 12th July, 2022) Putting a price cap on Russian oil will not work in the long term, as there is always a way to bypass restrictions, veteran US investor Jim Rogers told Sputnik.
During the G7 meeting in Germany on June 28-30, the leaders of the seven most economically advanced countries issued a communique saying that the oil price cap scheme could be implemented through the options such as allowing Russian seaborne crude oil and petroleum products to be shipped worldwide only if they are purchased at or below an agreed price threshold.
When asked if such a scheme would work, Rogers gave an emphatic "no."
"Because I have seen throughout history when people put things like that on, somebody figures out a way to get around," he explained. "Yes, it may work for a month or two, but then people in the black market or some other market will figure out a way to get around the sanctions, the controls or the caps and things will go on normal, not as normal but pretty close to normal. People have had sanctions and boycotts for many decades. Very few of them have worked for very long."
Rogers also believes that oil prices can return below $100 a barrel and stay there over the next three years.
"If things calm down in Ukraine, oil will certainly go below $100, there's no question about that. There's no question about that. But if the world economy gets very bad, oil could go below $100 because people that have a bad economy, they don't need as much oil as before," he said.
During the summit, the G7 leaders also reaffirmed their commitment to curb their countries' dependence on Russian energy, including by phasing out or banning the import of Russian oil and coal. At the same time, G7 encouraged oil producing countries to scale up their production to defuse tension in energy markets and mitigate impact on the most vulnerable and impacted countries.
The European Union imposed sanctions on Russia after it launched a military operation in Ukraine in February. The bloc has since introduced six packages of sanctions hitting Russia's banking, finances and media, government officials, and lawmakers, as well as oil supplied by sea. Several European leaders have called on Brussels to include a ban on Russian gas in the future seventh package.
