[Update Below] S&P Global has, once again, delivered a helpful visualization of the intended (likely? possible?) outcomes of G7 price caps on Russian oil and refined products (see below). S&Ps analysis and commentary highlights ambiguities, especially for shipping markets and related insurers. In any case, this is a further deployment of financial markets and mechanisms to make it more difficult for Russia to continue its war against Ukraine. Since the February 24 invasion, the G7 nations — Canada, France, Germany, Italy, Japan, United Kingdom, and United States (and EU) — have closely coordinated sanctions on Russia. According to an October 11 G7 statement, “We have imposed and will continue to impose further economic costs on Russia, including on individuals and entities – inside and outside of Russia – providing political or economic support for Russia’s illegal attempts to change the status of Ukrainian territory.” These actions are part punishment, part constraint, part setting the stage for future negotiations. Echoing Clausewitz (title’s German phrase ), this too is a “continuation of policy by other means” — perhaps two steps removed from direct violence. (More and more and more)
November 29 Update: The Financial Times delivers a very helpful “Big Read” on prospects for the price cap on Russian oil, with considerable attention to implications for network structures. S&P offers a skeptical angle on the entire effort.