Russia Ukraine conflict

US Treasury Secretary Yellen urges cooperation to counter Russia

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US Treasury Secretary Janet Yellen on Thursday urged leaders of major economies to back a price cap on Russian oil exports to counter economic shocks from Moscow’s invasion of Ukraine.

Yellen and other top financial officials of the Group of 20 rich and industrial nations are gathering in the Indonesian island of Bali for meetings that begin Friday.

She has been seeking support for a price cap on Russian oil that might help bring energy costs under control and alleviate the decades-high inflation seen in many countries.

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Oil prices have soared, partly due to the war in Ukraine, pushing up energy costs that accounted for about half the increase in inflation seen in the 9.1 percent annual jump in US consumer prices in June, Yellen noted.

It would be the latest effort to starve Russia’s military of revenue on top of thousands of sanctions already imposed on Russia to punish Moscow for the invasion.

“A price cap on Russian oil is one of our most powerful tools to address the pain that Americans and families across the world are feeling at the gas pump and the grocery store right now,” Yellen told reporters in Bali.

Yellen said no price had yet been determined for such a cap, but the level would have to be one “that clearly gives Russia an incentive to continue to produce, that would make production profitable for Russia.”

She said she was “hopeful” that countries like China and India that recently have boosted imports of Russian crude oil, sold at steep discounts, would see it as being in their own self-interests to observe the price cap.

Without a price cap, a European Union and probably a US ban on providing insurance and other financial services would take effect.

“So, we’re proposing an exception that would allow Russia to export as long as the price doesn’t exceed a yet to be determined level,” Yellen said.

The impact from the war has fallen most heavily on economies already struggling with mounting debt and other crises.

Yellen said a key objective of the Bali meetings would be to push countries like China to do more to help debt-distressed countries like Sri Lanka and Pakistan to restructure their obligations.

Countries whose economies already are in crisis, like Sri Lanka and Pakistan, are turning to the International Monetary Fund, a lending arm of the World Bank, and other institutions to help them cope with their surging debts and dwindling foreign reserves — problems that have ballooned as prices for oil, wheat and other commodities have soared partly due to Russia’s attack on Ukraine.

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