The United States and its allies are weighing a price cap on Russian oil products in order to limit the country’s revenues and better serve the West’s goal of straining Russia financially, Treasury Secretary Janet Yellen said on Monday.
Yellen’s comments confirm an earlier report that G-7 negotiators, in an effort to punish Russia for invading Ukraine, are considering a price cap within the limits of what European leaders, who generally have sought a longer off-ramp for ending Russian energy imports than the U.S., are willing to accept.
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“We are talking about price caps or a price exception that would enhance and strengthen recent and proposed energy restrictions by Europe, the United States, the U.K., and others, that would push down the price of Russian oil and depress Putin’s revenues while allowing more oil supply to reach the global market,” Yellen said during a visit to Canada.
G-7 negotiators had been working on such a proposal, Bloomberg reported Friday, ahead of the G-7 summit beginning June 26.
Russian oil production has fallen under the pressure of sanctions, but Russia’s per-barrel revenues are up due to the high price of crude oil globally, the opposite of what Western leaders want.
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The U.S. embargo on Russian energy products has been in effect for several months, but the Europeans and the British are still importing Russian oil.
The United Kingdom intends to phase out imports by the end of the year, while the EU plans to phase out some 90% of imports on the same timeline.
