WASHINGTON, Jan 11 — US Treasury Secretary Janet Yellen said yesterday that the price cap on Russian oil imposed by Western countries in December so far appeared to be achieving its goals of keeping Russian oil on the market while limiting Russia’s revenues.
“While the crude oil price cap has only been in effect for around a month, we have already seen early progress towards both of those goals, with senior Russian officials having admitted that the price cap was cutting into Russia’s energy revenues,” Yellen said at the start of a meeting with Canadian Finance Minister Chrystia Freeland.
The crude oil price cap was imposed on December 5 by G7 countries, including the United States, Canada and Australia, prohibiting the use of Western-supplied maritime insurance, finance and other services for cargoes priced above the cap level of US$60 (RM262.35) per barrel.
Russian Urals grade crude for delivery to Europe was quoted at US$52.48 yesterday, maintaining a steep discount to benchmark Brent crude, which was trading at US$80.82.
Yellen said energy markets remained well-supplied following the European Union’s ban on imports of Russian crude oil, also imposed on December 5.
“Public reports indicate countries are using the price cap to drive steep bargains on the price of Russian oil imports,” Yellen added.
But Moscow has vowed to ban oil supplies to countries that abide by the price cap starting on February 1, and Russia’s energy ministry said earlier yesterday it is working on additional measures to enforce the ban on direct or indirect use of the price cap.
The G7 coalition also is seeking to set two price caps by February 5 on Russian refined petroleum products, such as diesel and fuel oil, with a G7 official saying this may be more complicated to set than a crude oil price cap. — Reuters
