Seventy-two hours before they hoped to launch an unprecedented new plan to set a cap on the price of Russian oil, Biden administration officials faced a problem: Poland hadn’t yet signed off on the final design.
With support from Ukrainian President Volodymyr Zelensky, Poland had pushed for setting the cap as low as $30 a barrel, an attempt to deeply cut the Kremlin’s oil revenues. But the U.S. and other Group of Seven advanced democracies sought a deal at $60 a barrel to hedge against the risk of sending global crude prices soaring.
The last-minute negotiations put on display the problem that has defined Western economic statecraft ever since Russia invaded Ukraine: How to punish a large economy without creating a global recession. Russia’s oil industry—the largest exporter of crude and petroleum products in the world—was the West’s most difficult target yet.
Oil tankers in Nakhodka Bay in Russia’s Far East.
Photo:
TATIANA MEEL/REUTERS
Within minutes of Polish officials in Brussels requesting more time to review the proposal for a $60 cap, senior U.S. and Western officials began calling Warsaw—again.
Treasury Secretary Janet Yellen had already called Polish Prime Minister
Mateusz Morawiecki
on Thanksgiving Day. Deputy Treasury Secretary
Wally Adeyemo
was in touch with Polish counterparts throughout the talks, while Ms. Yellen huddled in Washington with Bjoern Seibert, a top aide to European Commission President
Ursula von der Leyen
leading the sanctions efforts, on Dec. 1. Meanwhile, U.S. Secretary of State
Antony Blinken
raised the issue on the sidelines of a NATO summit in Bucharest.
The lobbying worked. On Dec. 2, Poland agreed to the plan, clearing the way for the European Union and G-7 to implement a tool unlike any previous Western penalty on an oil-rich nation.
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