The Urals oil price -- the price Russia receives for its western crude oil exports -- ended the week at $67.42, well clear of the $60 / barrel price cap. Urals has exceeded the cap limit for the last seventeen days.

The Urals discount -- the difference between the Urals and European benchmark Brent oil price -- is holding steady at just under $18 / barrel, as it has for the last week or so. The discount has narrowed by $2 / barrel compared to the May-June average.

As I have written on several occasions, the Price Cap lost its effectiveness in April. Since that time, Urals has tracked Brent with a discount of about $20 / barrel. When Brent exceeds $80, Urals by extension exceeds $60.

Given that oil market fundamentals appear set to prop Brent above $80 going forward, the Price Cap can now formally be considered a failure. Policy-makers will face some difficult choices in their attempts to respond. Be that as it may, I think we can assume the Price Cap will return to the political agenda in the coming weeks, certainly after Labor Day.