During an interview with Bloomberg on Wednesday, Deputy Treasury Secretary Wally Adeyemo stated that the price cap on Russian oil proposed by the Biden administration “is in the economic interests of the countries” like China that are purchasing Russian oil.
Adeyemo stated, [relevant remarks begin around 1:22:00] “So, the reality is that the price cap is something that is in the economic interests of the countries that are purchasing oil from Russia today. When you think about it, many of these countries care deeply about the amount of money that they’re paying for Russian oil and they’re paying a discount to Russia today because they know that Russia has no alternatives. Enforcement will come through the normal means of making sure that countries know that, for example, you won’t be able to get insurance for a ship carrying Russian oil above the price cap, but in addition to the insurance measures and other financial services measures, there’s going to be a natural incentive for countries to join this coalition. And even if they decide not to formally join the coalition, they’re going to push Russia to pay as little as possible for oil because no one wants to pay more for oil than they need to and everyone knows that oil today costs more because of Russia’s unjustified invasion of Ukraine.”
Adeyemo added that he doesn’t think secondary sanctions will be needed “because in this case, what we’re doing is something that is creating the right incentives for the countries that are purchasing Russian oil.”
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