Yellen: G7-led Price Cap on Russian Oil Significantly Reduces Revenues
Yellen Highlights Impact of Price Cap on Russian Oil
U.S. Treasury Secretary Janet Yellen has emphasized the effectiveness of a G7-led price cap on Russian oil, stating that it has dramatically reduced Russian revenues over the past 10 months. Yellen stressed the importance of imposing severe and increasing costs on Russia due to its ongoing war in Ukraine. Speaking at the International Monetary Fund and World Bank meetings in Marrakech, Morocco, Yellen acknowledged that the war in Ukraine remains a major obstacle for the global economy.
Positive Outlook for Global Economy, but Risks Remain
Yellen also commented on the updated outlook provided by the International Monetary Fund, stating that the global economy is in a better position than previously anticipated. However, she highlighted the need to monitor potential downside risks. While some countries, such as China and the euro zone, are experiencing slowing growth, Yellen expressed optimism that there are currently no signs of broad spillovers that could destabilize the global economy.
Supporting Ukraine and Addressing Congressional Concerns
Yellen pledged continued support for Ukraine, emphasizing that the Biden administration is determined to ensure uninterrupted assistance to the country. She condemned the recent attack on Israel by Hamas gunmen but did not comment on its potential impact on the global economy. Yellen also addressed concerns regarding potential budget negotiations and their impact on aid to Ukraine, assuring that the Biden administration will work to mitigate the effects of Russia’s war on Ukraine.
Impact of Price Cap on Russian Oil and Sanctions
Yellen highlighted the significant impact of the price cap on Russian oil, stating that it has significantly reduced Russian revenue over the last 10 months while promoting stable energy markets. She revealed that global energy prices have remained largely unchanged, forcing Russia to either sell oil at a substantial discount or invest heavily in alternative solutions. The Group of Seven countries imposed sanctions in December, preventing shippers or insurers from G7 countries from facilitating Russian oil exports above $60 a barrel. Critics argue that Russia is circumventing these sanctions by utilizing older tankers, referred to as a “ghost fleet.”
Taxing Windfall Proceeds and U.S.-China Relations
Yellen expressed support for taxing windfall proceeds from Russian sovereign assets and utilizing the funds to support Ukraine. Additionally, she emphasized that the United States’ approach to U.S.-China relations is shaped by its focus on the global macroeconomy and addressing global challenges. Yellen announced her intention to meet with China’s top central banker, Pan Gongsheng, during her time in Marrakech.
It is vital to continue imposing severe costs on Russia and ensuring that the country is held accountable for the damage it has caused. By adhering to these principles, Yellen believes that progress can be made towards a more stable and secure global economy.
