Treasury Secretary Janet Yellen said the US is preparing to crack down on evasion of the Group of Seven’s price cap on Russian oil, as recent market prices signal that the mechanism may no longer be working as hoped.
In an interview with the Wall Street Journal, Yellen said the US is “looking at enforcement very carefully and we want to make sure that market participants are aware we take this price cap seriously, and, to the extent Western services are used, we mean business about abiding by the cap.”
The oil-price cap and its enforcement are expected to be on the agenda in talks between Yellen and her fellow G-7 finance chiefs in Marrakesh, Morocco, this week — on the sidelines of an annual gathering of the World Bank and International Monetary Fund.
The restriction is one of the sweeping financial penalties imposed over Russia’s 2022 invasion of Ukraine. The US and its allies imposed the price cap in late 2022, aiming to deny Moscow some of the revenue from its fuel sales, to undermine its war effort while keeping export volumes high to prevent world oil prices from spiking.