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U.S. Treasury says oil price cap 'institutionalizing' Russian crude discounts

12/02/2022 | 05:36pm EST
FILE PHOTO: Illustration shows models of oil barrels and a pump jack in front of U.S. and Russia flag colors

NEW YORK (Reuters) - The European Union's agreed $60 per-barrel price cap on Russian seaborne crude oil will keep global markets well supplied while "institutionalizing" discounts created by the threat of such a limit, a senior U.S. Treasury official said on Friday.

The official, speaking to reporters hours after EU governments persuaded holdout Poland to accept the cap, said the move will limit Moscow's oil revenues and divert billions of dollars away from its war in Ukraine.

"By setting the price at $60 per barrel, we're institutionalizing the steep discount at which Putin has been forced to sell Russian oil, a discount that exists in part because the threat of the price cap has forced Russia to offer bargain deals to importing countries," the official said.

In a separate statement, U.S. Treasury Secretary Janet Yellen said the price cap would further constrain Russian President Vladimir Putin's revenues.

"With Russia's economy already contracting and its budget increasingly stretched thin, the price cap will immediately cut into Putin's most important source of revenue," Yellen said.

(Reporting by David Lawder; Editing by Chris Reese)


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
BRENT OIL -1.57% 86.05 Delayed Quote.1.71%
S&P GSCI CRUDE OIL INDEX -1.88% 436.6984 Real-time Quote.1.18%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -2.68% 68.732 Delayed Quote.-3.48%
WTI 0.00% 79.45 Delayed Quote.0.75%
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