The Dunce’s Cap

Thursday, 21 July 2022 — The van says…


YellenRather than Yellen putting a price cap on Russian oil, she ought to be wearing a dunce’s cap for being the prize idiot of current affairs.


The western world and more pointedly the US wishes to put a cap on the price of Russian oil exports in order to alleviate rocketing fuel prices. This article will be looking at the matter, its effects and where it fits into global commodities markets.

Russia on a Roll

Russia’s Special Military Operation in the Ukraine has been under way since February, yet in spite of all the measures implemented by the western world, not only are its forces rolling across the Ukraine, but with the effect that the conflict has had on global markets, hydrocarbon exports are also ensuring that the revenue rolls in. Increased trade with both India and China mean that the fuel that was originally destined for Europe is still delivered, albeit at lower prices.

The West Rolling Over

It was never supposed to happen this way. If Russia had succumbed to western pressure and done as it was told, the West would not be facing the future that it now is. The fact that the Kremlin stood up and did what was right put western markets on their asses, rising fuel costs now creating real headaches for the very nations that were already heading towards a recession before they upped the ante against Russia. The very measures that the West imposed on Moscow have not only boomeranged, but they are hurting European economies far more than Russia.

Enter the Idiots

It is well known that the US attempts to exert authority where it has no right, yet the latest idea to be aired in Washington is that of capping the price of Russian oil exports. In light of high energy prices as well as equally high Russian exports, Janet Yellen, US Treasury Secretary plans to stymie Russian exports wherever possible in order to bring Russia round to the western way of thinking.

A Preposterous Plan

Washington claimed that ‘A price cap on Russian oil is one of our most powerful tools to address the pain that Americans and families across the world are feeling at the gas pump and the grocery store right now’, yet quite how on earth Yellen, the American administration and their cronies hope to implement this plan beggars belief. Put simply, the US and its allies-in-tow hope to interfere and leverage the international energy market by ensuring that Russia cannot sell oil at above a certain price set by Washington. This idea is not new and at the G7 meeting in June, it was proposed that ‘all services, which enable transportation of Russian seaborne crude oil and petroleum products globally, unless the oil is purchased at or below a price to be agreed in consultation with international partners.’ It is hoped that major buyers of Russian oil will shun Russian products in favor of the undoubtedly overpriced ones from western-approved sources, yet there are obstacles and hurdles aplenty even if the plan were to be put into action.

Further to this, with maritime insurance being absolutely dominated by the West, (95% of tankers globally are insured through the International Group of Protection & Indemnity Clubs in London) governments will only allow vessels to be insured if the cargo conforms to the price-rigging tactics of Washington.

Pushing the Plan

This is where things become more precarious for this absolutely madcap scheme dreamt up by western idealists. The first is the fact that should exports of Russian fuels fall, rather than the price of oil going down, global prices will rocket, further angering a number of Asian nations that have come to rely not only on Russia’s exports, but the trust between themselves and Moscow.

The next issue is that whilst G7 et al wish to cut purchases of Russian commodities, these have already been slashed over the last year. The idea of severing ties regarding oil and gas may be very plausible in the headlines, yet when we consider that shipments have plummeted at the same time as Russia has no interest whatsoever in trading with untrustworthy western partners, the bark of the plan is much bigger than the bite of the politics, slamming the door in the face of a Russia that has already walked away.

The next problem is how this plan would be policed. Should western nations attempt to halt, board or commandeer vessels and their cargoes, that would be tantamount to piracy, this overnight turning an economic heist into a military matter. The Merriam-Webster dictionary states that piracy is: ‘an act of robbery on the high seas’, and notwithstanding all the pomp and authority the western world claims to have, should it attempt to confiscate ships or shipments, not only will both Russia and the buyer be on the warpath, so will their military assets.

The fourth quandary facing the West is that with Saudi Arabia saying this week that it does not wish to raise production higher than current levels, a huge hole is going to appear in global inventories as we go forward. The American driver may be complaining it costs four dollars a gallon to fill his car, but if supplies tighten through another botched plan by Washington, fat Sam and his six liter SUV will be going nowhere at all.

The Terror of Teheran

Whilst not directly related to the delusion sweeping Washington, the meeting between Putin, Ebrahim Raisi, the president of Iran and Recep Erdogan in Teheran this week is most noteworthy due to the Russians and Iranians signing a memorandum of understanding worth $40 billion between the National Iranian Oil Company (NIOC) and Gazprom. Iran has long been the target of hostile actions from Washington and even in spite of the White House repeatedly dangling the carrot of sanctions ‘relief’, nothing has ever come of these promises. With agreements such as these in the offing, not only has Teheran now got bona fide trading partners, it also takes a lot of the pain out of the measures that have crippled its economy for so long. With deals like this happening outside of the US’ sphere of control, it is little wonder that Washington and the Fed are adopting ever-more arcane tactics in their attempts to halt the inevitable.

Sundry Subjects

For all the aims that this potty plan has, there are other affairs that are of indirect concern. The first is that China has reduced its holding of US treasuries to the lowest level in ten years, this being yet another sign that the East is now looking away from the West when it comes to trade.

Another matter concerning Teheran is its nuclear development program that the West is desperate to stop. After Trump withdrew from the JCPOA in 2018, his successor has repeatedly tried to coerce Teheran into walking back into the deal that Washington walked away from. With Iran now having new friends and the US looking to a troubled future for a number of reasons, the boot is now on the other foot, Washington desperate for Iranian oil, yet it is Moscow that got a pledge inked.


As plans go, this one comes straight out of the loony bin. With Russian exports to the West decreasing all the time, the amount of legal leveraging available to Washington is shrinking by the day. That only leaves rather more dubious tactics, these being little more than either global price-rigging or piracy under the Stars and Stripes rather than the Jolly Roger. Quite how threats such as these will be regarded by Russia’s customer states remains to be seen, yet as Washington attempts to Pivot to Asia, we may see Asia rapidly pivoting away from the US.

The Middle East is quite another matter however, but local rivalries aside, with Riyadh not wanting to boost production and Teheran not wanting anything at all to do with the West, schisms are appearing that strongly favor a shift of power to the East with Uncle Sam and his friends languishing in the consequences of their failed politics towards Russia.

America may attempt to turn world trade on its head by attempting to cap the price of Russian oil, but with a plan as dumb as this, the only thing on Uncle Sam’s head is a dunce’s cap…

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