U.S. Treasury: Russia’s Oil Income reduced remarkably by G7 Price Cap
Russian oil sales revenue has been “significantly” reduced as a result of the U.S.-led price cap on Russian oil exports, according to U.S. Treasury Secretary Janet Yellen on Wednesday.
According to Yellen, the G7 price ceiling on Russian oil has “significantly reduced Russian revenue over the last 10 months while promoting stable energy markets,” she said during a news conference during the International Monetary Fund (IMF) and World Bank meetings in Morocco, as reported by Reuters.
Russian crude shipments to third countries are allowed to use Western insurance and finance if cargoes are sold at or below the $60 per barrel threshold, according to the price cap on Russian crude oil set by the G7 and the EU. End of 2022 saw the implementation of the measure when the EU banned the import of Russian crude oil.
“We must continue to impose severe and increasing costs on Russia and continue efforts to ensure Russia pays for the damage it has caused,” Yellen said today.
The U.S. Treasury Secretary also said that the U.S. government had not in any way relaxed sanctions on Iran’s oil exports, Bloomberg’s energy and commodities columnist Javier Blas reported.
Analysts have attributed the recent surge in Iranian oil production and exports – especially increased shipments to China – to weaker enforcement of the U.S. sanctions.
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Analysts predict that the U.S. sanctions against Iran’s oil trade may be strengthened if the Hamas-Israel conflict worsens and Israel accuses Iran of having a direct or indirect role in the attack by Hamas on Israel this past weekend.
“The softer approach from the US is likely due to concern over rising energy prices. However, it would be difficult to see the US maintaining this stance if Iran is connected to these attacks, whether directly or indirectly,” Warren Patterson, Head of Commodities Strategy at ING, said earlier this week.
