The price at which Russian oil can be exchanged outside of the EU will be capped at $60 per barrel, the latest attempt by Western allies to deny Moscow the money it needs to fund its conflict in Ukraine.

However, there are significant doubts as to whether such a plan could be implemented and whether Russia and its biggest customers, notably China and India, would accept the price set by the Group of Seven industrialized nations.

Key points of the plan:

Although Russia will be making less money on selling its oil, this aims to let Russia keep selling oil

The main export of Russia is oil, and its partners in the West do not want that to stop. In addition to raising costs at a time of already skyrocketing worldwide inflation, doing so would significantly reduce the global supply. Additionally, it would have an impact on nations like India and Turkey, two major consumers of Russian crude, whose backing the West is attempting to use to keep pressure on Moscow.

The main export of Russia is oil, and its partners in the West do not want that to stop. In addition to raising costs at a time of already skyrocketing worldwide inflation, doing so would significantly reduce the global supply. Additionally, it would have an impact on nations like India and Turkey, two major consumers of Russian crude, whose backing the West is attempting to use to keep pressure on Moscow.

It is a restriction on shipping and insurance businesses, not actually a price cap.

Although Janet L. Yellen, the U.S. Treasury secretary, referred to the proposal as a price cap, it is virtually impossible to control the price of a commodity that is traded on a worldwide scale like oil. The strategy instead mainly relies on Europe's monopoly on the maritime insurance sector, a network of businesses that offer protection for ships and their cargo, liability for potential spills, and reinsurance, a secondary insurance used to offset the risk of losses.

The majority of the main shipping lines and insurers have their headquarters in Group of 7 nations. The strategy forbids such businesses from handling Russian crude unless the shipment has been sold for the Group of 7-set price or less. They will be held accountable for breaking the rules if it is not.

Some of Ukraine's closest allies did not agree with the price that was established.

Some European nations, notably harder-line pro-Ukraine ones like Poland, were disappointed by the $60 per barrel pricing since they hoped to see the Kremlin lose much more money from its oil sales. The agreed-upon price still enables Moscow to make large profits because Russia's oil production expenses are estimated to be $20 per barrel and the benchmark price for Russian oil has traded between $60 and $100 per barrel in the previous three years.

Diplomats from the European Union who took part in the negotiations expressed displeasure over what they perceived to be an American-led approach that burdened them with expensive implementation expenses without materially changing Russian income.

According to U.S. officials, it would be preferable to set a price so high that Russia would agree to pay it by continuing to ship the majority of its oil exports through American and European infrastructure, such as ships and insurance.

Experts are dubious, and Russian buyers might figure out a way to get past the cap.

Industry representatives have questioned the viability of the scheme, which depends on each participant in the Russian oil supply chain certifying the cost of shipments. Insurance companies and shippers have issued warnings that Russia and trading partners wishing to maintain the flow of oil may falsify data.

According to the Kremlin, it won't sell to nations who adhere to the price system, so those who want to buy Russian oil may find a way around it. One strategy would be side payments, such paying too much to Russia for wheat or other non-sanctioned commodities, as happened in the 1990s when the UN attempted to impose a similar plan on Iraq.

If supplied or insured by non-European businesses, which a senior U.S. Treasury official predicted would be more expensive but not subject to fines, China, India, and other countries may purchase Russian oil at any price. And according to Treasury Department instructions, sanctions would not apply to Russian oil that had been sold under the pricing mechanism but later "significantly altered" or processed outside of Russia.

Companies that are found to have willfully broken the regulation will be prohibited from providing services for Russian oil for three months, according to the policy's detractors.