On Friday, Treasury Secretary Janet Yellen announced the G7 had agreed to impose a price cap regime on Russian oil. As with most other actions by the U.S. and Europe related to Russia's unjust war against Ukraine, the announcement of the cap was big on rhetorical flourish, but thread-bare on any evidence of a coherent strategic objective.

The intent of the cap is to set a global price just above Russia's marginal cost so that Moscow won't make a profit on the sale of oil but high enough that Russia won't stop producing altogether. Current global demand can't be met without the nearly nine million barrels of oil per day provided by Russia, and if Putin were to stop producing suddenly, the resulting supply shock could send the price of oil into the stratosphere.

The purpose of the cap, Yellen claimed, would be to "deliver a major blow for Russian finances and will both hinder Russia's ability to fight its unprovoked war in Ukraine and hasten the deterioration of the Russian economy." It remains to be seen if the G7 can make good on its aspiration and actually develop and implement a worldwide price cap scheme. But along with other actions sponsored or endorsed by the United States government, it is far from certain what end state Washington hopes to obtain.