The head of the US Treasury has called for a maximum price of $60 per barrel for Russian crude
According to US Treasury Secretary Janet Yellen, setting a ceiling price for Russian oil at around $60 a barrel is expected to reduce Moscow’s energy income while ensuring profitable production.
“So certainly a price in that range would be enough to feel like Russia could profitably produce and sell oil.” he said at an event at the International Monetary Fund and World Bank meetings in Washington, adding that Russia’s cost of production was “bass.”
Yellen emphasized that Moscow has been willing to produce and sell oil in the $60 range for the past five to seven years. Russian Urals crude has been trading at around $75 a barrel in recent months, or a $17 discount to benchmark Brent futures.
“The goal is to protect the world from the consequences of a global rise in oil prices,” said the senior official regarding the price cap.
He added that Washington and its allies are still discussing where to price a cap mechanism.
Washington’s efforts to cap the price of Russian oil to deprive Moscow of energy revenues won support from the G7 countries. But big importers like India and China, along with many developing countries, did not join them.
Earlier this month, the EU approved its eighth package of sanctions on Russia, which includes a maximum oil price that would take effect after December 5, 2022 for crude oil and February 5, 2023 for refined products from the Petroleum.
Russian President Vladimir Putin has warned that Moscow will not supply power to countries that take steps that contradict the terms of existing oil and gas contracts.