Western powers, particularly the Group of Seven wealthy nations are working to fix a price cap on Russian oil. They expect major buyers in the West, Australia included, will comply and not buy Russian oil above the price cap. Their hope is that even countries that don’t formally subscribe to the cap, will use the opportunity to negotiate with Russia and buy the Urals crude at prices cheaper than even the price they now get – which is said to be at a 20-30% discount to global oil prices. The idea is to allow Russian oil to continue to flow in the global markets so that supply constraints don’t drive up prices and hence strengthen the possibility of a global recession that is already on the horizon.

There's no saying if this will take off or fall apart, but the U.S. Treasury Department has been able to convince the G7 to go along with the proposal. We have with us today, David Wessel, Director, The Hutchins Center on Fiscal and Monetary Policy, Brookings Institution, and a two-time Pulitzer Prize winner as a journalist, to share some perspectives with us.

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