US official warns of ‘decisive’ response if Russia sells oil outside price cap or G7 service providers
Any attempts by Russia to sell oil above the oil price cap or sell crude without G7 involvement will trigger a ‘decisive and unified response,’ US Acting Assistant Secretary for Economic Policy Eric Van Nostrand warned in a speech at the Brookings Institution in Washington, DC.
The United States and its partners in the so-called Price Cap Coalition, which includes the G7, the European Union, and Australia, have agreed to prohibit the import of crude oil and petroleum products of Russian origin unless it is bought and sold at or below the specific price caps established by the Coalition or is authorised by a licence.
‘Russia has accepted a significant discount on oil sold under the cap, and also made a decision to spend huge amounts of money on an alternative ecosystem to sell oil without G7 involvement,’ Nostrand said in his remarks, delivered 16 October.
He added: ‘The costs associated with this avoidance keep stacking up: Putin has purchased hundreds of new oil tankers for billions of dollars, and he faces elevated costs of insurance, longer transport times to new importers, elevated capital expenditures on domestic oil wells without G7 involvement, and reinvestments in ports that service non-G7 providers.‘
Nostrand said that the United States and its allies ‘are now launching the second phase of our effort which will constrain Russia’s profits by increasing the costs associated with using non-G7 services.’ He added, ‘Russia will continue to be forced to face two costly options – selling under the cap and spending more to operate outside the G7 nexus – and that attempts to evade them will face a decisive and unified response.’
‘Our goal of promoting stable global energy markets remains unchanged, and Russia can continue to export energy products through either channel,’ Nostrand commented.
