The US Treasury mulls over the proposal of the Biden administration to wrest control of Russia's over energy imports by proposing an oil price cap. Treasury officials are not confident the US and G7 could dictate to Vladimir Putin what they want to happen.
Capping Could Prevent Soaring Oil, Gas Prices
A senior US Treasury official told reporters in Tokyo that capping the price of Russian oil exports may prevent the price of a barrel from rising globally by 40% to reach roughly $140, report Sputnik News.
In June, the price is $120 per barrel though it hovers at $103 for now. This desperate measure to impose a price cap on Russian crude was discussed by the G7 countries last June in Germany from the 28th to 30th, noted Reuters.
For the idea she said may avert a worldwide recession, Treasury Secretary Janet Yellen has started what has been labeled a "lobbying" visit to the Indo-Pacific area.
In addition to visiting Japan and South Korea during her 10-day tour, she will also attend a conference of the finance ministers from the G20 nations in Bali on July 15 and 16.
Japan, a major importer of Russian energy, has so far abstained from backing the price-cap plan that Yellen has advocated.
An anonymous source said that her meeting with the Japanese Finance Minister Shun'ichi Suzuki on Tuesday in Tokyo; will need convincing that the oil price cap will not jeopardize Japan's energy security despite the US treasury's doubts.
Europe Suffers Energy Shortages
The US wants to get Russian oil cheaply and prove it has the clout to drive energy costs lower and demonstrate forcing Moscow to its terms. But, like most of his schemes, Joe Biden has gone south and made Vladimir Putin mad enough to stop imports, noted Fars News.
Even though G7 leaders are willing to follow Washington's lead, they are not confident how the US can convince anyone to go with the plan; even major oil producers have snubbed the White House.
In their meetings, the G7 summit established a lower price per barrel at $40-$60, even a threat to Russia using sea lanes that are not under US control is doubtable. Some treasury officials aren't confident, and it might fail altogether.
The European Union followed the US lead and penalized Russia's banking, financial, and media organizations, government officials, and lawmakers. Next, oil supplied via shipping was drawn in sanctions.
Additionally, several European leaders urged Brussels to include a ban on Russian gas in any upcoming sanctions measures. However, the prohibition on Russian imports has worsened supply shortages and raised prices.
As a desperate act, the EU is acting under US instruction to ban Russian oil and a restriction on maritime insurance for any tanker transporting it. While Janet Yellen says, a price cap is a solution, not how to implement it.
The US Treasury thinks that the Biden administration and forcing an oil price cap is not a sure thing, and Russia can starve all its adversaries because it has options.
Related Article : White House Convinces India, Japan To Support Russian Oil Price Cap
