Page 4 - FSUOGM Week 28 2022

FSUOGM COMMENTARY FSUOGM

US seeks Asian support for

Russian oil price cap

China and India could be the key to the plan working, but their support is uncertain.

ASIA US Treasury Secretary Janet Yellen will shortly followed by discussions in Seoul, the US Treas-
head off to Asia to meet officials from Japan, ury said in a statement. The trip is part of a
WHAT: South Korea and other G20 countries, in the broader effort to “reassert America’s leadership
The US is looking to build hope of securing their support for a price cap on role in the region and globally,” and expand sanc-
up Asian support for a Russian oil. tions on Russia over its Ukraine and counter the
cap on the price that While the US and Europe are stepping steps threat of an increasingly assertive China.
Russian oil is sold at. to eliminate Russian oil imports, these efforts In line with previous proposals, Washington
will take time, and in the meantime, Moscow’s is looking to introduce a “price exception” that
WHY: oil export revenues have soared as a result of sky- would remove a ban on maritime insurance for
The aim is to deprive high prices. It has also been able to divert some Russian oil when the price cap was observed,
Moscow of revenue supplies shunned in Europe to Asian markets, an official told Reuters. Details are still being
to finance its war in particularly China and India. Western officials worked out on how to structure and implement
Ukraine. have therefore been in discussions for some the cap, but Washington is discussing it with “a
weeks on introducing the price cap, which would growing number” of countries and seeing “good
WHAT NEXT: essentially limit how much Russia can earn from progress.”
China in particular seems oil exports, depriving it of revenue it can use to “The more we talk to different countries
unlikely to agree to a plan finance its war in Ukraine. about it, the more they understand the con-
that, if successful, would Yellen will hold bilateral meetings in Tokyo cept that we’re putting forward and understand
financially cripple Russia. on July 12-13 before gathering with G20 finance the rationale,” a second official told the news
officials in Bali, Indonesia, on July 15-16, agency. If the cap is not introduced, Moscow can

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