The Limited Times

Now you can see non-English news...

Oil: USA and allies explore price ceiling

2022-06-21T05:35:21.503Z


Less revenue for Russia, more oil for the world market: According to US Treasury Secretary Janet Yellen, western countries want to break the spiraling price of oil with a price cap.


Enlarge image

Burning excess gas in an oil refinery in Schwedt: The West wants to reduce Putin's income

Photo: HANNIBAL HANSCHKE / REUTERS

According to US Treasury Secretary Janet Yellen, the US and allied states are negotiating a price cap for oil in order to contain the economic consequences of the Ukraine war and reduce Russia's income from oil exports.

The partners are discussing how they could "prevent negative effects on the global economy," Yellen said during a visit to Canada.

"We're talking about a price cap or a price suspension," Yellen told reporters.

Both options, according to Yellen, would have several implications: They would increase Western sanctions on Russian energy sources and "depress the price of Russian oil and reduce Putin's revenues" - while at the same time allowing more oil to enter the international market.

When asked whether US President Joe Biden intends to seek consensus on an oil price cap at the G7 summit in Germany next week, the minister replied: "We are working very actively with our partners on this."

According to Yellen, a price cap would also prevent "side effects on low-income countries and developing countries," which are currently struggling with high food and energy prices.

Yellen announced the negotiations during a visit to her Canadian counterpart and Deputy Prime Minister Chrystia Freeland.

Among other things, the meeting discussed strategies for dealing with the effects of the Ukraine war, high inflation and problems in global supply chains.

Upper price limit is also being discussed in Germany

Federal Economics Minister Robert Habeck had already spoken about the option of a price cap for oil.

In this way, Russia could be sanctioned and the oil price captured, Habeck explained back in May.

"There's the idea that people come to an agreement and say we're not going to pay any price here anymore," he said, describing the procedure.

But such a step would only work if a large number of countries took part and Russia could not use other sales markets.

Recently, however, China had imported significantly more oil from Russia.

The EU, meanwhile, is planning an extensive ban on imports of Russian oil.

However, this only affects transports with oil tankers by sea. Pipeline oil was excluded from the embargo at the urging of Hungary in particular.

The EU embargo should also take effect with sometimes long transition periods.

Denmark announces early warning level for gas

The throttled gas supplies from Russia meanwhile bring more and more countries in Europe into distress.

The government in Denmark called the early warning level in the gas emergency plan out of concern for the gas supply.

"The situation is serious and has been exacerbated by curtailed deliveries," said the head of the Danish Energy Agency, Martin Hansen, in a statement on Monday.

The Danish gas storage facilities are currently 75 percent full, and more gas has recently been added.

At the end of May, Gazprom announced that it would stop delivering to the Danish company Orsted.

In the gas emergency plan - which is based on an EU regulation from 2017 - the alert level and the emergency level follow.

The plan enables EU countries to support each other in gas deliveries, but can also justify gas rationing.

Germany had already declared the gas early warning level at the end of March.

Last Friday, the Federal Network Agency classified the situation in its management report as "tense" after the Russian Gazprom group had throttled its gas supplies to Germany several times.

mmq/AFP/Reuters

Source: spiegel

All business articles on 2022-06-21

You may like

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.