Russia could profit from selling oil even with $60 price cap: Yellen
- Russia could benefit from its oil exports even with a price cap of $60, said Janet Yellen.
- She said Russia has been willing to produce and sell its crude in this range in the past.
- The G7 countries want to cap Russian oil to limit its revenue by controlling world prices.
Russia could still profit from its oil exports even if a $60-a-barrel price cap is in place, US Treasury Secretary Janet Yellen said.
She said a $60 level would still hit Moscow’s revenue from oil and petroleum products, speaking at meetings of the International Monetary Fund and World Bank in Washington.
The United States and its allies are still figuring out where to set the cap, Yellen said. The aim of the G7 plan is to cut Russia’s revenue from its crude exports, which swelled Moscow’s coffers following the invasion of Ukraine as prices soared.
Yellen said that for the past five to seven years, Russia has been willing to produce and sell its oil for around $60.
“So it is certain that a price in this range would be sufficient to estimate that Russia could produce and sell oil profitably,” she said.
The G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – agreed to set a price cap for Russian oil in early September in a bid to reduce Moscow’s revenue and limit its ability to finance its war against Ukraine. .
The group has floated a range of $40 to $60 a barrel for the cap, which it wants to schedule alongside the EU embargo on maritime supplies of Russian crude in December.
“The goal is to protect the world from the consequences of a global oil price spike,” Yellen said of the plan.
Oil prices soared to highs near $130 a barrel in early March, in the weeks following Russia’s invasion of Ukraine. But they have been on a downward trend since June, falling nearly 25% on fears that a weakening global economy could dampen demand.
Brent crude futures were down 1.6% at $93.01 a barrel when last checked on Friday, while US benchmark WTI crude futures were down 1.9 % at $87.42 a barrel.