{"id":1732,"date":"2025-09-27T17:23:41","date_gmt":"2025-09-27T17:23:41","guid":{"rendered":"https:\/\/igorsplayground.com\/appcheckr\/the-new-old-regime-etf-trends\/"},"modified":"2025-09-27T17:23:41","modified_gmt":"2025-09-27T17:23:41","slug":"the-new-old-regime-etf-trends","status":"publish","type":"post","link":"https:\/\/igorsplayground.com\/appcheckr\/the-new-old-regime-etf-trends\/","title":{"rendered":"The New Old Regime | ETF Trends"},"content":{"rendered":"

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FaST (Few Sentence Takeaway):<\/strong> The headlines surrounding Russian oil sanctions and NATO involvement are gaining traction following President Trump’s suggestion of imminent sanctions and tariffs. Importantly, a mechanism is already in place to execute this plan, making the sanctions relatively straightforward to implement.<\/p>\n

Sanctions are not a new concept. Recently, there have been renewed calls for punitive tariffs on China related to its purchases of Russian oil. While much of the media focus is on the additional sanctions linked to NATO countries, this overlooks a crucial aspect: the sanctions, tariffs, and other measures will not be limited to Russia. Any facilitation\u2014whether explicit or tacit\u2014could lead to consequences. Maybe.<\/em><\/p>\n

This isn\u2019t a \u201cnew\u201d policy; it has been communicated for some time. However, President Trump made some noteworthy pivots. Notably, India was not mentioned, with the primary focus on isolating China for its support of the conflict. NATO was highlighted as the \u201ccoalition of the willing.\u201d New Regime, Same as the Old One.<\/strong><\/p>\n

Interestingly, there has been minimal discussion about the Price Cap Coalition (PCC). This coalition was a creative approach to allow Russian oil to flow while limiting price realization, setting a price cap at $60 per barrel. The aim was to keep oil markets supplied without enabling a wartime windfall for Putin.<\/p>\n

Without delving into the enforcement mechanisms of the price cap\u2014primarily through the insurance channel\u2014it appears to have effectively capped the price of Russian crude. Earlier this year, European countries adjusted the calculation to further restrict the price, as too many European tankers were transporting crude. Their solution? Implement a \u201cfloating cap\u201d set at \u221215% of the trailing six-month average, currently below $50.<\/p>\n

A new price cap<\/em><\/p>\n

Until mid-July, the initial price cap of $60 per barrel for Russian crude, established in December 2022, remained unchanged. The EU has now opted to switch to a floating cap, ensuring it is always 15% lower than the average price of the Russian Urals blend over the previous six months. The EU\u2019s new price cap will take effect on September 3, lowering the cap price to $47.60 per barrel.<\/strong> The UK has also announced a similar floating cap. Even if other coalition member countries have yet to decide, European companies play a significant role in the global oil trade.<\/strong><\/em><\/p>\n

The introduction of this new price cap mechanism has significant implications, leading to a substantial decrease in the cap. Due to recent declines in global oil prices, the $60 price cap was no longer binding, resulting in European tankers accounting for about 50% of Russian oil exports in the spring of 2025.<\/strong> The reduced price cap compels Russian oil companies to seek alternative carriers for their export routes.<\/em><\/p>\n

\u2014 Bank of Finland, 9\/8\/25<\/p>\n

Why is this important? Because the PCC essentially represents NATO.<\/strong> The skepticism surrounding the feasibility of this agreement overlooks the fact that Europeans have already unilaterally agreed to lower the price cap, which is a significant signal.<\/p>\n

Of course, the critical question remains: so what?<\/p>\n