US Treasury chief explains goals of Russian oil price cap

United States Treasury Secretary Janet Yellen has said that the goal of the Russian oil price cap is to reduce Russia’s revenues while continuing the supplies. 

“The price cap only went into effect at the beginning of this week. But I would say so far, so good,” CBS News quotes her as saying on December 11.

Yellen recalled that the G7 countries, which includes the US and the European Union (EU), plus Australia agreed to a price cap of $60 a barrel on Russian oil last week.

“The first goal [of the price cap] is to limit the revenue that Russia receives. And we wanna make sure that they don't get windfall profits. But the second goal is one that concerns Americans and countries all around the world, and that is we wanna keep Russian oil flowing because Russia is a significant supplier of oil to the markets. So, those are our two goals, suppress Russian revenue, make it more difficult for them to fight the war, and keep global prices in a moderate range, and avoid spikes,” the US Treasury secretary remarked.

In general, the sanctions imply that companies in countries that have agreed on a ceiling cannot provide brokerage, shipping, insurance and other services for the maritime shipment of Russian oil to third countries unless this oil is sold at a price below a certain level.