US, Allies Considering Price Cap on Russian Oil to Hurt Putin

US, Allies Considering Price Cap on Russian Oil to Hurt Putin

  • Secretary Janet Yellen said the US and its allies are Treasury discussing a price cap on Russian oil.
  • One aim is to “push down the price of Russian oil and depress Putin’s revenues,” she said Monday.
  • A cap would also boost oil supply to the global market, Yellen said.

The US and its allies are actively discussing a price cap on Russian oil, Treasury Secretary Janet Yellen said Monday.

She told reporters in Toronto that one aim of a cap would be to “push down the price of Russian oil and depress Putin’s revenues.”

Another aim would be “allowing more oil supply to reach the global market,” she said during a joint press conference with Canada’s finance minister Chrystia Freeland.

Oil prices have soared since Russia invaded Ukraine, helping to push the price of gas past $5 a gallon. Russia is the world’s top natural gas exporter and a leading oil exporter, and uses revenue from these exports to help finance its war in Ukraine.

Yellen said a price cap on Russian oil would be “an important way to prevent spillover effects to low income and developing countries that are struggling with high costs of food and energy.”

She did not provide a timeline for the price cap but said the US was “actively working” with partners on imposing one ahead of the G7 leaders summit in Germany next week.

Freeland said Canada supported a price cap but acknowledged “it is a more challenging situation for Europeans.”

The European Union is heavily reliant on Russian oil and gas. Russia supplied around 40% of the bloc’s natural gas in 2021, according to EU data. Europe is also a prominent buyer of Russian oil and was responsible for half of Russia’s crude oil exports in 2021, Insider previously reported.

Insider also reported earlier this month that Russian oil and gas sales could hit $285 billion this year, a 20% increase on 2021, amid surging prices.

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