The US-led price cap on Russian oil exports has “significantly” reduced Russia’s revenue from oil sales, US Treasury Secretary Janet Yellen said on Wednesday.
Reuters quoted Yellen as saying at a news conference during the International Monetary Fund (IMF) and World Bank meetings in Morocco that the G7 price cap on Russian oil has “significantly reduced Russian revenues over the past 10 months while promoting stable energy markets.”
The price cap of $60 per barrel for Russian crude oil was set by the G7 and the EU. It states that Russian crude oil shipments to third countries can use Western insurance and financing if the cargoes are sold at or below the $60 per barrel ceiling. The measure took effect at the end of 2022, when the EU imposed an embargo on imports of Russian crude.
“We must continue to impose severe and increasing costs on Russia and continue our efforts to ensure that Russia pays for the damage it has caused,” Yellen said today.
Bloomberg energy and commodities columnist Javier Blas also reported that the U.S. Treasury secretary said the U.S. government has in no way eased sanctions on Iran’s oil exports.
Analysts have blamed weaker enforcement of U.S. sanctions for the recent surge in Iranian oil production and exports, particularly increased shipments to China.
If the Hamas-Israel war escalates and Israel accuses Iran of direct or indirect involvement in this weekend’s Hamas attack on Israel, U.S. enforcement of sanctions on Iran’s oil trade could be tightened, analysts say.
“The softer US approach is likely due to concerns about rising energy prices. However, it would be difficult to see the US maintaining this stance if Iran is linked directly or indirectly to these attacks,” Warren Patterson, head of commodities strategy at ING, said earlier this week.