Crude could soar to $140 a barrel if a Russian price cap is not implemented, a Treasury official told GLM.
The world price of oil could rise about 40% to $140 a barrel if a proposed price cap on Russian crude is not imposed, a senior US Treasury official told Reuters on Tuesday.
The warning comes as Treasury Secretary Janet Yellen began a trip to Asia on Tuesday to drum up support for the price cap proposal. She plans to hold talks on the matter with Japanese Finance Minister Shunichi Suzuki. She is also expected to raise the issue during meetings with G20 finance ministers in Indonesia and during a stopover in South Korea.
An unnamed Treasury Department official also told Reuters that Washington has proposed an exception to the marine insurance ban for imports of Russian crude priced below the cap to prevent millions of barrels from being stranded.
Skepticism Grows Over Proposed Russian Oil Price Cap
Last month, G7 leaders discussed imposing a price cap on Russian crude of around $40 to $60 a barrel, to limit Moscow’s revenue from energy sales. The idea was first floated by Yellen earlier this year and then taken up by the G7, which is considering an embargo on shipping Russian crude oil by sea unless it is bought at a price that is will agree with or below international partners. .
Oil prices rose slightly on Wednesday, with benchmark Brent trading above $100 a barrel and US West Texas Intermediate trading at $96.60 a barrel.