U.S. Treasury officials plan to press ahead at this week’s IMF meetings with a cap on the price of Russian oil, despite Wednesday’s decision by OPEC+ to cut oil production that’s already driven gas prices higher.
Treasury Secretary Janet Yellen and Deputy Treasury Secretary Wally Adeyemo will discuss the cap with other world finance ministers at the annual meetings of the IMF and World Bank that run Monday through Sunday in Washington, D.C.
OPEC+, the international governing organization of oil exporting countries which counts Russia among its expanded membership, announced an expected output cut of 2 million barrels per day last week, a move the Biden administration reportedly tried to block amid rising fuel costs.
But the cutback has no bearing on the G-7’s strategy to deny Russia a substantial income source to continue funding its war in Ukraine by capping the price of the country’s oil, a senior Treasury official told reporters Monday.
“We’ve been working on the price cap for a number of months. We’re continuing to move forward with our coalition in the design and finalization of that and that would have been happening in any case,” the official said.
G-7 finance ministers announced the price cap last month.
Higher gas prices from the OPEC+ decision will be “felt particularly by low- and middle-income countries, which are already bearing the brunt of the increase in global energy prices,” the official said.
Adeyemo will is scheduled on Friday to brief member countries on the impact their sanctions have had on Russia’s military supply chains. The Deputy Treasury Secretary will also consult with senior officials from over 20 participating countries, including Canada, the U.K. and the E.U., on how to redouble those efforts, according to senior Treasury officials.
Yellen plans to call on the coalition to further restrict Russian President Vladimir Putin‘s access to capital and military equipment needed to continue the war in Ukraine.
After Russia launched coordinated missile strikes across Ukraine Monday, India and China, which have refrained from outright condemning Russia’s invasion, called for a peaceful resolution to the crisis. Each country has sought to distance itself from Putin even as they continue to support Russia by buying its oil.