According to US Treasury Secretary Janet Yellen, the United States is currently negotiating a price cap for oil with friendly states. This is intended to limit Russia’s oil export revenues. That would have three advantages for the global economy.
Washington is in talks with “partners and allies around the world” about how to “further limit Russia’s energy revenues” and “prevent negative impacts on the global economy,” Yellen said on Monday (local time) during a visit to Canada.
Yellen added that these are “price caps” or a “price exemption” that would have several effects: They would “amplify” Western sanctions on Russian energy sources, pushing down the price of Russian oil and thus reducing revenues for the Russian government – while allowing more oil to enter the international market. A price cap would also prevent “side effects on low-income and developing countries” that are currently struggling with high food and energy prices.
Yellen announced the negotiations during a visit to her Canadian counterpart and Deputy Prime Minister Chrystia Freeland. Among other things, the meeting discussed strategies for dealing with the effects of the Ukraine war, high inflation and problems in global supply chains.
