(Bloomberg) -- Treasury Secretary Janet Yellen is pressing European counterparts to embrace measures designed to enforce a price cap on Russian oil, a move that US officials hope would maintain global crude oil supplies while at the same time limiting Moscow’s revenue.
Yellen spoke Monday with Constantinos Petrides, the finance minister of Cyprus, a major maritime player that serves as Europe’s largest ship-management center. The two “spoke about the goal of placing a price limit on Russian oil to deprive the Kremlin of revenue to finance their war in Ukraine while mitigating spillover effects for the global economy,” the Treasury said in a statement.
The US is also pushing Cyprus to impose a ban on Cypriot-flagged vessels transporting Russian oil to third countries, according to a person familiar with the matter. Petrides raised concerns about such a step, however, given that many other countries aren’t imposing sanctions on Russia, the person said, asking not to be named as the discussion was private.
A US Treasury spokesperson didn’t immediately respond to a request for comment.
The European Union recently unveiled a sixth round of sanctions that specifically targets Russian seaborne oil, phasing in a ban on the commodity among its constituent nations over several months. To alter the language to incorporate more comprehensive measures would mean renegotiating a deal among 27 countries, some of which would be expected to resist any substantive alteration.
An early draft of that EU package included proposals to ban European ships from transporting Russian oil, but that was dropped after maritime nations, including Greece and Cyprus, argued that an international agreement on the matter was needed.
Yellen told Petrides nevertheless that the US intends to impose a price cap, according to the person familiar with the discussion.
The price-cap idea, which would allow some trade in Russian oil below a certain price per barrel, is expected to be a part of the end-of-summit communique issued by the Group of Seven countries as they wrap up their summit at Schloss Elmau, Germany.
Details on the plan haven’t been released, but the US is seeking to impose restrictions on insurance and shipping to enforce it.
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