Yellen: Failure To Agree On Russian Oil Price Cap Disastrous

US Treasury Secretary Janet Yellen warned that a failure to place a price cap on Russian oil would hurt the global economy. “Without a price cap, we face the threat of a global energy price spike if the majority of Russian energy production gets shut in,” Yellen said, on Wednesday.

The European Union has decided to ban nearly all oil from Russia by the end of the year. It also will ban insuring and financing the maritime transport of Russian oil to other countries. Unless a price cap is implemented, prices will spike.

The UK and other G7 countries agreed in June to pursue a ceiling on the price of Russian oil. Getting as many other nations as possible to agree to join a buyers’ cartel has been one of Treasury’s main objectives to curb Russia’s ability to finance its war in Ukraine.

Oil kept the Russian economy afloat despite export bans, sanctions and the freezing of central bank assets.

Limiting the price would reduce the Kremlin’s income from oil, and a cap would encourage the country to continue producing.