The Russian oil price cap imposed by the US and its allies remains in place, a senior US Treasury Department official said, even as Russian crude continues to rise.
Since mid-July, Russia’s flagship Urals crude has traded above $60 a barrel, while some refined oil products have exceeded limits set by the US, the Group of Seven and the European Union.
The United States is happy to see that Russia is keeping the market well-supplied and does not want to “disrupt the global oil market in a way that could lead to instability,” said Eric Van Nostrand, Acting Assistant Secretary for Economic Policy. an interview with Bloomberg Television.
“Nine months after implementation, the cap is working,” he said, adding that the policy has reduced Russia’s revenue and that any breach will be scrutinized by US and allied enforcement agencies.
Van Nostrand also said the US is judging the policy’s performance by whether it allows buyers around the world to negotiate bigger discounts for Russian supplies.
“We don’t measure its success just by how many oil molecules travel under the cap specifically,” Van Nostrand said. “We see it as a market mechanism to change the incentives of the oil market.”
–With assistance from Rishaad Salamat, Anand Menon, Sharon Cho and Christopher Condon.
