Ep. 102: The economics of sanctioning a petrostate

In response to Russia's 2022 invasion of Ukraine, the G7 imposed a price cap of $60 per barrel on all Russian oil carried by tankers owned, insured, or serviced by Western companies. Many analysts expected the policy to backfire, with some warning that oil could reach $380 if Russia retaliated by cutting production. In a paper in the American Economic Review , authors Simon Johnson , Lukasz Rachel…