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U.S. Treasury's Adeyemo says $60 oil price cap will limit Russia's revenues

Commodities Dec 01, 2022 12:01PM ET
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© Reuters. U.S. Treasury Department Deputy Secretary Wally Adeyemo attends the Reuters NEXT Newsmaker event in New York City, New York, U.S., December 1, 2022. REUTERS/Brendan McDermid

By Dan Burns

NEW YORK (Reuters) -U.S. Deputy Treasury Secretary Wally Adeyemo applauded a European Union deal for a $60-a-barrel price cap on Russian oil exports on Thursday, saying this was within the range of discussed price levels and would limit Moscow's oil revenues.

Adeyemo told the Reuters NEXT conference that he believes that EU member countries will finalize the price cap agreement because they have consistently applied sanctions to punish Russia for its invasion of Ukraine.

The European Union tentatively agreed earlier on a $60 level to start the price cap, with a regular adjustment mechanism.

"It's in the range of prices that we've been talking about for a while in terms of creating and helping us do two things. One is reducing Russia's revenues. But the second one is making sure that we keep Russian barrels on the market," Adeyemo said.

He added that the price cap agreement "can accomplish those two goals and put us in a position where Russia's revenues come down while ensuring that people get access to reliable, cheap energy around the world."

Adeyemo said it was difficult to know how much Russia is earning from its oil exports, but even if some market prices are currently below the $60 price cap level, the mechanism will limit the upside of Russian oil prices and further shrink Russia's economy in 2023.

"And the key thing to remember is that we're starting at $60 but we have the ability to...further use the price cap to constrain Russia's revenues over time."

To view the Reuters NEXT conference live on Nov. 30 and Dec. 1, please click [https://www.reuters.com/world/reuters-next/]

U.S. Treasury's Adeyemo says $60 oil price cap will limit Russia's revenues
 

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Comments (2)
jonathan seagull
jonathan seagull Dec 04, 2022 12:02AM ET
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Indoubt it: russia sells crude oil to India, China and rest of Asia including Japan at a price tag less than $60/b. The upper cap is simply a joke, only provoking ego of Putin.
Tyler Phillis
Tyler Phillis Dec 01, 2022 12:45PM ET
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Price caps only work when they are respected. 1/3rd of the global market is made up of authoritarian thugs who respect nothing but brute force. How does Europe intend to enforce this…cap?
 
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