Energy Geopolitics
Sanctions, embargoes, the price-cap experiment — how policy interacts with the regional energy structure
On December 5, 2022, the G7 (United States, Canada, United Kingdom, France, Germany, Italy, Japan), the European Union, and Australia — together the 'Price Cap Coalition' — implemented a $60-per-barrel price cap on Russian-origin seaborne crude oil per US Treasury Office of Foreign Assets Control (OFAC) and EU Council disclosures. The mechanism was novel in modern energy geopolitics: rather than banning trade in Russian crude above $60/bbl outright, the cap banned Coalition-domiciled service providers — shipping, insurance, trade finance, brokering — from supporting Russian crude cargoes priced above the cap. The same date saw the EU's prohibition on imports of Russian seaborne crude into the EU under the 6th sanctions package, with pipeline crude (the Druzhba system) initially carved out, though Germany and Poland subsequently self-banned.
Two months later, on February 5, 2023, the EU extended the embargo to refined products from Russia and added two product-level price caps: $100/bbl for premium products (diesel, kerosene, gasoline) and $45/bbl for discount products (fuel oil, naphtha) per US Treasury and EU Council disclosures.
That is the opening. Finishing a lesson is where it stops being interesting and starts being useful: the full lesson runs to 7 sections and ends with 6 practice questions. A free account is what opens the rest, and the other 255 lessons in the Academy with it. No card.
What this lesson covers
- 1The shadow fleet and the structural workaround
- 2Iran and Venezuela — the longer-running sanctions frameworks
- 3The price-cap arithmetic and revenue-reduction logic
- 4Major sanctions architectures affecting global crude markets — recent context
- 5December 5, 2022 — the \$60/bbl price cap, the EU embargo, and the most ambitious sanctions experiment in modern energy markets
- 6Where to see this on the platform
- 7Summary