The challenge that Vladimir Putin posed to the established economic order of the globe was unsuccessful.

On December 5, a restriction on the price of Russian seaborne oil of $60 per barrel went into effect. This cap, which had been agreed upon by the European Union, the G7, and Australia just a few days before, marked the beginning of a new phase in the economic conflict between Russia and the West.

It is possible that the price cap is one of the most significant ripostes to Russia's weaponization of its energy reserves since the commencement of Russia's all-out invasion of Ukraine; nevertheless, what it comprises and aspires to achieve appear to be generally misunderstood by the general public.

In spite of the widespread belief to the contrary, the price cap in no way represents an attempt to put an end to crude oil exports from Russia. On the other hand, it seeks to ensure that they continue to flow despite ever-tightening laws and sanctions, although not to western markets. This is in contrast to the previous goal. Since February, China, India, and a huge number of other third nations have been importing Russian crude in enormous quantities and at heavily discounted prices. These countries still have the ability to continue doing so. The goal of the cap is not to restrict these purchases; rather, it is to restrict Russia's profits, which are primarily used to pay Russia's military endeavor, by ensuring that the discounts that are currently in effect will remain in effect indefinitely.

The international coalition that is fighting Russia's invasion of Ukraine has had a difficult time reaching a consensus on this step; the exact parameters of the agreement were only accepted by all parties on December 2. The challenge lay in determining where exactly to place the cap. In the end, the countries came to the consensus that it should be set at $60, which was higher than the price point at which the majority of Russian oil was trading on the eve of the limit. Poland was the final holdout, despite being the European nation that has been arguably the most supportive of Ukraine in the wake of Russia's invasion. Warsaw concurred with the assessment of Ukrainian President Volodymyr Zelenskyy that if the limit were set at that level, Russia would be able to maintain a certain level of profitability from the barrels it sells.

However, in the end, all parties came to an agreement on a cap of $60, because they saw that at that level, Russia's profits can be vastly restricted without causing a major disruption to global oil markets, which could cause prices to skyrocket for everyone. In other words, they saw that at that level, they could limit Russia's profits without sending prices through the roof for everyone. In point of fact, any reduction in the price ceiling would have most likely compelled Russia to take extreme measures, such as ceasing all exports, and caused harm to all countries that import oil along with Russia.

Since February, the Kremlin has already been exporting its oil at considerable discounts, despite the fact that it has been complaining and crowing about any such price caps being an unacceptable breach of its sovereignty. Consequently, a cap of $60 is not much more than an effort to make the current system permanent in practical terms.