Russian oil revenues are declining as a result of the price caps that Western nations have placed on its crude oil shipments, and an official from the U.S. Treasury said on Wednesday that Europe is well-positioned to handle any price pressures before further price caps are placed on Russia’s oil products.
On February 5, the Group of Seven nations, Australia, and the European Union will increase sanctions against Russia for its involvement in the conflict in Ukraine by capping the price of its petroleum products, such as gasoline and diesel. The coalition placed a $60 per barrel limit on sea-borne Russian crude oil sales late last year.
According to the senior Treasury official, Russia is losing a lot of money every day as a result of the cap.
According to the official, ‘For every dollar Russia is not receiving in revenue, that is one less dollar they can use to support their economy or invest in the weapons they need to fight this illegal war in Ukraine.’
The representative did not provide an estimate of the losses in Russian export revenue. But because the cap forces nations that want Russian oil above the cap to use a shadow fleet of non-Western ships and risk using ‘less reliable’ insurance, the official claimed that the cap has raised shipping costs for some Russian oil cargoes.
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