[Goose]

WSJ editorial board agrees with the secondary sanctions.

https://www.wsj.com/opinion/donald-trump..._permalink

I think this only works because oil is relatively cheap now. If oil were pricey, I think we’d balk; oil is fungible and anything that reduces supply would push prices up.  Maybe with oil hovering at $60/barrel that’s fine, but if anything happens and oil shoots up to $100 and gas prices nationally go north of $4/gallon and I bet we lose our nerve.

BC

The supply of oil is "artificially" limited by OPEC+. The US is also not operating anywhere near capacity. As long as the US and OPEC+ are willing to increase the supply to compensate for the lost Russian production the price of oil will not spike. Kazakhstan has been exceeding OPEC+ quotas for quite a while. Just make that officially OK and problem solved :-). You are correct in being concerned about the price of oil being driven up if the Russian supply is curtailed/off limits.

The US and "the west" plus OPEC+ will need to manage the supply effectively. Even more important they will have to ensure that the publicity around secondary sanctions reassures the oil market that a price run-up will not happen. Ideally there would be an agreement in place with India that guarantees them a supply of oil at a price no higher than the maximum limit already established for Russian oil. Whether the administration can and will prioritize executing this diplomatic coup is TBD.

[Goose]

WSJ editorial board agrees with the secondary sanctions.

https://www.wsj.com/opinion/donald-trump..._permalink

I think this only works because oil is relatively cheap now. If oil were pricey, I think we’d balk; oil is fungible and anything that reduces supply would push prices up.  Maybe with oil hovering at $60/barrel that’s fine, but if anything happens and oil shoots up to $100 and gas prices nationally go north of $4/gallon and I bet we lose our nerve.

BC

The supply of oil is "artificially" limited by OPEC+. The US is also not operating anywhere near capacity. As long as the US and OPEC+ are willing to increase the supply to compensate for the lost Russian production the price of oil will not spike. Kazakhstan has been exceeding OPEC+ quotas for quite a while. Just make that officially OK and problem solved :-). You are correct in being concerned about the price of oil being driven up if the Russian supply is curtailed/off limits.

The US and "the west" plus OPEC+ will need to manage the supply effectively. Even more important they will have to ensure that the publicity around secondary sanctions reassures the oil market that a price run-up will not happen. Ideally there would be an agreement in place with India that guarantees them a supply of oil at a price no higher than the maximum limit already established for Russian oil. Whether the administration can and will prioritize executing this diplomatic coup is TBD.