The price cap imposed on Russian oil by Western countries has benefited both parties. The very fact of having set the cap pleases the West. Russia is glad that the ceiling is higher than the current market price. Meanwhile, India and China are happy they can buy oil at a discount.
US Treasury Secretary Janet Yellen has recently given her assessment of the price cap on seaborn Russian oil. According to the US Treasury Department’s boss, the goal of restricting Moscow’s oil revenue has been achieved. However, when some countries purchase Russian oil inside the cap, states such as China and India demand an even bigger discount. Official data shows that Russia’s oil revenue has fallen to the lowest level on record.
All in all, in a CBS interview, Janet Yellen outlined two goals of the oil price ceiling – to suppress Russian revenue and keep global prices in a moderate range. “The price cap only went into effect at the beginning of this week. But I would say so far, so good,” the Treasury Secretary emphasized.
The G7 countries, Australia, and the European Union have recently agreed to adopt a $60-per-barrel market cap on seaborn Russian oil. Restrictions came into effect on December 5th. Norway joined the agreement three days later. At the same time, Janet Yellen stressed the importance of keeping Russian oil flowing because Russia is a significant supplier of oil to the market.
