WASHINGTON: US Treasury Secretary Janet Yellen will continue to press the case among her G20 counterparts for a price cap on Russian oil, to choke off funds for Moscow to continue the war in Ukraine, officials said.
Yellen will be in Bali for the meeting finance ministers and central bank governors July 15-16, where she will further the efforts to build support for the move, a senior Treasury official told reporters Thursday.
A “growing global coalition” of countries shares Washington’s objectives of denying Russian leader Vladimir Putin revenue to fund his military, as well as “addressing the impact that his unprovoked war is having through high energy prices, which is particularly hurting emerging markets.”
Western sanctions on Russia in the wake of the invasion in February have caused a surge in global food and fuel prices, creating a policy headache for world leaders as well as the risk of a humanitarian crisis.
The Group of Seven leaders agreed late last month to explore a mechanism to implement the ceiling, rather than try to limit the volume of Russia’s oil exports – which could have the unwanted effect of driving prices even higher, helping Moscow and hurting consumers.
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“The more we talk to different countries about it, the more they understand… the rationale and as well as some of the risks of not doing a price cap,” the official said.
The US proposal builds on the European Union plan to halt Russian oil imports at the end of the year, and ban maritime insurance, which would hinder Moscow’s ability to ship crude to its remaining customers.
Washington is calling for a “price exception” to that ban, that would allow insurance for oil shipped under the price cap, another Treasury official explained.
“The concept is to have an exception based on price to the maritime insurance ban in order to allow Russian oil to flow but Russia not to reap the financial benefits of that have that flow,” the official said.
Yellen will travel to Japan before the G20 meeting, and to South Korea after, where she will discuss ramping up sanctions on Moscow as well as securing supply chains through “friend-shoring” – producing key inputs in allied nations, Treasury said.
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