WASHINGTON: US Treasury Secretary Janet Yellen said on Tuesday (Jan 10) that the price cap on Russian oil imposed by Western countries in December so far appeared to be achieving its goals of keeping Russian oil on the market while limiting Russia’s revenues.
“While the crude oil price cap has only been in effect for around a month, we have already seen early progress towards both of those goals, with senior Russian officials having admitted that the price cap was cutting into Russia’s energy revenues,“ Yellen said at the start of a meeting with Canadian Finance Minister Chrystia Freeland.
The crude oil price cap was imposed on Dec 5 by Group of Seven (G7) countries, including the United States, Canada and Australia, prohibiting the use of Western-supplied maritime insurance, finance and other services for cargoes priced above the cap level of US$60 (RM262) per barrel.
Russian Urals grade crude for delivery to Europe was quoted at US$52.48 on Tuesday, maintaining a steep discount to benchmark Brent crude, which was trading at US$80.82.
Yellen said energy markets remained well-supplied following the European Union’s ban on imports of Russian crude oil, also imposed on Dec 5.
“Public reports indicate countries are using the price cap to drive steep bargains on the price of Russian oil imports, she added.
But Moscow has vowed to ban oil supplies to countries that abide by the price cap starting on Feb 1, and Russia's energy ministry said earlier on Tuesday it is working on additional measures to enforce the ban on direct or indirect use of the price cap.
The G7 coalition also is seeking to set two price caps by Feb 5 on Russian refined petroleum products, such as diesel and fuel oil, with a G7 official saying this may be more complicated to set than a crude oil price cap.
Meanwhile, Yellen is digging in to oversee billions of dollars in federal climate and infrastructure spending that she believes will transform the economy, close associates say, defying demands from Republicans to step down.
Yellen’s oversight of about US$270 billion in tax credits for electric vehicles, home solar panels and other climate purchases contained in the Inflation Reduction Act have made her a pivotal climate figure in President Joe Biden’s administration.
But the high profile, as well as signals from markets and some economists of a coming recession, are expected to intensify demands from Republicans for Yellen, 76, to step down, citing her too-rosy inflation forecasts and her failure to rein in federal spending that they say is to blame.
Yellen has also clashed with Republican lawmakers over the statutory limit on US debt, warning that a failure to raise the debt ceiling threatened America’s credit rating and could disrupt financial markets.
She has publicly and repeatedly shaken off speculation that she would step aside midway through Biden’s four-year term, steeled by what close associates say is her confidence in Biden’s continuing support.
The White House and Treasury had no immediate comment on a Bloomberg report saying that Biden asked her personally to stay on. – Reuters