US Treasury Secretary Janet Yellen has said that countries buying oil from Moscow should form a coalition aimed at “locking in” Russian oil and preventing energy price hikes amid the sanctions.
Yellen was asked at the New York Times’ DealBook DC Policy Forum on Thursday whether it was possible to assemble “a cartel” of buyers of Russian oil to prevent the prices from going too high.
“There would need to be a reasonably large group of countries that would go along with it. And it would be necessary to create such a coalition,” Yellen replied.
“But I would point out that the European Union has already announced that they will phase out Russian oil purchases, but beyond that, they’ve said that they will also prohibit European countries from insuring tanker shipments out of Russia, and the UK is very likely to go along with such a ban. And that could have the effect of locking in a good deal of Russian oil.”
At the same time, Yellen acknowledged that the sanctions have had “a huge” effect on the global rise of the cost of food and energy.
“Our sanctions have been remarkably effective, but we continue to tighten them, and oil prices could go further,” she said.
Yellen’s comments come two days after she told the Senate that the US has been experiencing “unacceptable levels” of inflation, especially regarding food and gasoline prices.
Many countries, including the US and EU member states, imposed sweeping sanctions on Moscow following the start of Russia’s military campaign in Ukraine in late February.
Brussels promised to phase out Russian gas by 2030, and banned the import of Russia oil by sea last week. It was a compromise that allowed Hungary and other countries heavily dependent on Russian energy to continue receiving oil via pipelines.
The Kremlin warned that the curtailing of Russian oil exports will not only hurt Russia and the EU, but will have “a negative effect” on the global energy market.
Russia attacked Ukraine following Kiev’s failure to implement the terms of the Minsk agreements, first signed in 2014, and Moscow’s eventual recognition of the Donbass republics of Donetsk and Lugansk. The German- and French-brokered protocols were designed to give the breakaway regions special status within the Ukrainian state.
The Kremlin has since demanded that Ukraine officially declare itself a neutral country that will never join the US-led NATO military bloc. Kiev insists the Russian offensive was completely unprovoked and has denied claims it was planning to retake the two republics by force.