Page 4 - NorthAmOil Week 27 2022

NorthAmOil COMMENTARY NorthAmOil

A freeze on Russian oil profits? (Photo: Twitter/@Sovcomflot_ru)

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

US Treasury Secretary Janet Yellen will shortly on July 12-13 before gathering with G20 finance
head off to Asia to meet officials from Japan, officials in Bali, Indonesia, on July 15-16, fol-
WHAT: South Korea and other G20 countries, in the lowed by discussions in Seoul, the US Treasury
The US is looking to build hope of securing their support for a price cap said in a statement.
up Asian support for a on Russian oil. The trip is part of a broader effort to “reas-
cap on the price at which While the US and Europe are stepping steps sert America’s leadership role in the region and
Russian oil is sold. to eliminate Russian oil imports, these efforts globally,” and expand sanctions on Russia over
will take time, and in the meantime, Moscow’s its Ukraine and counter the threat of an increas-
WHY: oil export revenues have soared as a result of ingly assertive China.
The aim is to deprive sky-high prices. It has also been able to divert In line with previous proposals, Washington
Moscow of revenue to fi- some supplies shunned in Europe to Asian is looking to introduce a “price exception” that
nance its war in Ukraine. markets, particularly China and India. Western would remove a ban on maritime insurance for
officials have therefore been in discussions for Russian oil when the price cap was observed,
WHAT NEXT: some weeks on introducing the price cap, which an official told Reuters. Details are still being
China in particular seems would essentially limit how much Russia can worked out on how to structure and implement
unlikely to agree to a plan
that, if successful, would earn from oil exports, depriving it of revenue it the cap, but Washington is discussing it with “a
financially cripple Russia. can use to finance its war in Ukraine. growing number” of countries and seeing “good
Yellen will hold bilateral meetings in Tokyo progress.”

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