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No Plan for Secondary Russia Sanctions After Oil Price Cap in Place: US Treasury

CC0 / / Oil rig
Oil rig - Sputnik International, 1920, 12.10.2022
WASHINGTON (Sputnik) - The United States is not planning to implement secondary sanctions against Russia once the price cap on Russian oil is in place, US Deputy Treasury Secretary Wally Adeyemo said on Wednesday.
"We're not planning to implement secondary sanctions because we do not think that they're needed,” Adeyemo said at the Columbia Global Energy Summit in Washington. “Ultimately, the thing we are working towards is creating economic incentives for all parties to be in a position where you are continuing to allow oil to flow [while] bringing down the costs for buyers and revenue for Russia, which we think economically makes sense for all players here."
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Adeyemo emphasized that Russia had a choice of selling its oil to any party at any price it wished. However, if Russia wanted to use Western vessels and services to transact and carry that oil, then the sale price had to be at the level capped by the United States and its allies, in their bid to reduce Russian revenues from energy sales that would go into funding the Ukraine war, he said.
Asked if the Biden administration was concerned that Russia could retaliate against the price cap by shutting down most or all of its oil exports and adding to the global supply squeeze and price of energy, Adeyemo replied that the United States had already stopped buying Russian oil and Europe was in the process of doing the same.
“The question then becomes, what can we do to make sure that we're encouraging Russian oil to flow to countries that need it most, in Africa and Latin America and Asia,” Adeyemo said. “And that's exactly why we've come up with this price exception or price cap idea. If Russia decides to find services that they can use to ship the oil to those countries, they should feel free to do that. We think that fits within our objectives of allowing Russian oil to flow. But if they're unable to find those alternative services, we also want to make clear to not only Russia, but to those [purchasing] countries that we're going to allow that oil to be carried by Western service providers, as long as it's sold at a level below the market price to allow those countries to get some relief from the high cost of energy today.”
Adeyemo added that the price cap plan was expected to win support even from major Russian allies, such as China and India, who were interested in bringing down the cost of energy.
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