West indian countries

US not trying to put new countries on G7 oil price cap, says Yellen

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India is looking at it carefully. Ms Yellen’s comments suggest this is now moot, from a membership point of view or not

India is looking at it carefully. Ms Yellen’s comments suggest this is now moot, from a membership point of view or not

washington d.c.

US Secretary of State Janet Yellen said there was no attempt to sign countries up to a Russian oil price cap that is being implemented by a coalition of Advanced Economies Group of the Seven (G7), the European Union (EU) and Australia.

Since the cap was announced in early September, Indian officials have said India has been considering it carefully. Ms Yellen’s comments suggest that this is now moot, from a membership perspective or not.

“All these countries have agreed to ban the provision of services that companies in our countries provide for the transportation of Russian oil. And the EU sanctions package includes shipping. And beyond that, we don’t ‘Let’s not try to enroll additional countries in a coalition,’ Ms Yellen told reporters on Friday during a press briefing at the International Monetary Fund (IMF).

The coalition hopes that, as the bulk of marine insurance transits there, buyers of Russian oil who wish to avail themselves of trade finance, insurance and other associated financial services from these Western countries will respect the ceiling of price.

Russia has said it will not sell to any country that participates in the price cap, perhaps explaining Ms Yellen’s comments that the United States is not counting on formal participation in the price cap coalition, but on modification of purchase incentives.

“And what we really need in the rest of the world is just that potential buyers – companies from those countries, in some cases governments, but usually companies from countries around the world – just understand that the price caps will work,” Ms. Yellen said.

The success of the program will not be measured by how many countries sign up to it, Ms Yellen explained, but for there to still be a flow of Russian oil into the market and for countries to use the leverage provided by the cap to get oil at lower prices. India has already increased its purchases of Russian oil, at reduced prices, since the country began an invasion of Ukraine on February 24.

“So we want to reduce Russia’s revenue and keep that oil in circulation,” she said, adding, “We don’t benefit from the cheaper oil.” Ms Yellen went on to say she hoped countries in Africa, Latin America and Asia would now have access to cheaper oil, once the EU had “essentially” stopped its purchases. The EU plans to halt its purchases of Russian crude which is delivered by sea in December – 2/3 of its Russian crude imports.

“No decision made on the actual price level of the ceiling”

The coalition of countries that impose a restriction on financial services associated with the purchase of Russian oil will jointly decide on the appropriate level of the cap – and this price can be changed over time, Ms Yellen said, stressing that no decision is ‘has been taken. made on the actual ceiling.

Read also | Explained: What does the G7 expect on Russian oil?

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