G-7 finance ministers on Friday are set to discuss putting a price cap on Russian oil, according to US National Security Council spokesman John Kirby.
Kirby said Wednesday that the idea of a global price cap for Russian oil is to cut the country’s main source of cash and help force down the price of Russian oil.
“I would add that the United States has already taken strong action to ban Russian oil and US allies have announced plans to wind down their own imports of Russian oil. But (Russian President Vladimir) Putin has continued to try to find new markets for his oil,” he told a virtual press conference. “
“And we believe this price gap is the most effective way to hit hard at that revenue. And doing so will not only result in dropping the price of oil and revenue but it’ll also help with the global energy prices,” he said, adding the idea is worth “exploring” and “implementing.”
While the US is trying to reduce Russia’s oil revenue by implementing a price cap, it also wants to lower crude prices to bring down the cost of oil for American consumers.
Russian Central Bank Governor Elvira Nabiullina said last month that Moscow would not supply crude to the US or EU countries that plan to impose a price cap on Russian oil.
Some analysts argue that putting a price cap on Russian oil could push crude prices as high as $140 per barrel due to the complexity of the global oil market.