Investing.com – Washington is racing against time to persuade major importers of Russian oil to agree to a price cap on this market-flooding oil, arguing that it could deprive Moscow of much of the revenue it uses to build its war machine.
However, in order to succeed in his endeavors, the white eggs must obtain a consensus on the part of buyers, led by India and China, in addition to the difficulty of the matter, concerns are growing about angering Moscow, which may push it to cut off oil supplies to unfriendly countries, which may push prices to More ignition.
US Treasury Secretary Janet Yellen said failure to cap the price of Russian oil would harm the global economy and threaten stability.
“Without setting a price ceiling, we face the risk of rising global energy prices if the majority of Russian energy production is stopped,” Yellen added at the start of a meeting with her British counterpart Nadim al-Zahawi.
The European Union has decided to ban almost all types of oil from Russia by the end of the year, and will also ban the insurance and financing of shipping Russian oil to other countries, unless a price cap is applied, it is almost certain that prices will rise.
The UK and other G7 nations agreed in principle in June to pursue the Russian cap.
Getting as many other countries as possible to agree to join the buyers’ cartel was one of the Treasury’s main goals in its quest to limit Russia’s ability to fund its war in Ukraine.
US Treasury Secretary Jaylen said there had been significant progress towards making the price cap a reality and she was optimistic that it would happen. Britain’s Chancellor of the Exchequer said Britain intended to influence key countries to join the plan.
Treasury officials have said that the price restriction will reduce the Kremlin’s income from oil, and the capping will encourage the country to continue production, while world leaders fear that Russia may restrict its energy supplies in response, causing prices to rise.
Setting a price cap would also limit the impact of higher oil prices on inflation in consuming countries, Yellen said, where the cost of gasoline and diesel continues to put pressure on consumers and businesses, especially in Europe.
To be effective, Yellen added, participating countries must collectively agree to buy oil at below market price.
China and India
Yellen said China and India, two countries that largely resisted signing off on efforts to punish the Kremlin and maintained trade ties with Russia during the war, would need to join in.
Zahawi said there is clearly more to be done and we are ready to work in particular to persuade more countries to support this measure, citing India, Turkey, South Africa and other countries as potential participants.
Treasury leaders would visit allies and neutral parties in the war to demand their participation, even if only informally.
“We think it’s not just an idea worth exploring, it’s an idea worth executing, and we look forward to hearing what the finance ministers have to say over the weekend,” national security spokesman John Kirby told reporters.
The White House said finance ministers from the Group of Seven nations would discuss setting a ceiling on Russian oil prices when they meet this week.
White House spokeswoman Karen-Jean-Pierre said: “This is the most effective way, we believe, to severely reduce Vladimir Putin’s revenue, and to do so will not only lower Russia’s oil revenue, but global energy prices as well.”
Karen added that the proposal will be discussed further this week at the meeting of the Group of Seven finance ministers, which will be held next Friday, in addition to discussing other alternatives, including preventing the transportation of Russian oil.
Western leaders have proposed reducing Russia’s revenue during its war against Ukraine by setting an oil price ceiling to limit how much refiners and traders can pay for Russian crude, a move Moscow says it will not stick to and could thwart it by shipping oil to countries that do not adhere to a price cap.