Mr. Fishman, who previously led planning and the negotiation of international sanctions on Russia at the Department of State, said there were several reasons to be optimistic. One is the recent softness of oil markets, which he interpreted as meaning that Russian oil was no longer as critical to the markets as it was a few months ago. He also said the agreed $60 price was a “Goldilocks” level, not so high as to give Russia even more revenue than it is currently receiving or so low as to discourage Moscow from producing oil.
He also said that the cap’s provision to review the price level every two months, or more frequently if needed, provided the “flexibility” that historically has helped make sanctions, like those targeting Iran’s oil sales, effective.
Still, there is plenty of skepticism and confusion about these measures. For starters, analysts say, data about pricing Russian oil has become scarce in recent months. Few if any trades are reported, and prices quoted in the market “are mostly based on hearsay,” said Viktor Katona, an analyst at Kpler, a research firm that tracks shipping.
Helima Croft, an analyst at RBC Capital Markets, an investment bank, said that reputable shipping and insurance companies might be spooked by the risks and unknowns of the price cap and decide to steer clear.
“Light touch enforcement signals may not be sufficient to overcome initial unease,” she wrote in a recent research note.
The G7 nations — the United States, Canada, Britain, Germany, France, Italy and Japan — have already mainly stopped buying Russian oil, so any problems with a decline in Russia’s exports may have more impact on the economies of countries like China and India, big customers that have declined to condemn Russia’s invasion of Ukraine.
The looming embargo and the price cap were the chief reasons that OPEC and its allies, including Russia, decided on Sunday to leave their quotas for oil production unchanged. The group, known as OPEC Plus, appears to have decided that there was no reason to alter its policy amid the many economic uncertainties, including a stumbling economy in China and crippling inflation globally that are fueling fears of a recession.
Many analysts believe Saudi Arabia, the de facto leader of the producers’ group, is seeking a price of about $90 a barrel for Brent crude. The Saudis, according to market watchers, would probably cut production, regardless of protests from Ukraine and its allies, if prices fall significantly from that level.