"It’s a risk that we're working on the price cap to try to address this winter. The European Union will cease for the most part buying Russian oil. In addition, they will ban the provision of services that enable Russia to ship oil by tanker and it is possible that that could cause a spike in oil prices," she told CNN.
A price ceiling on Russian oil will be designed to lower Russia’s revenues while maintaining supplies of Russian oil to the global market to hold down global crude prices, Yellen explained.
"I believe this is something that can be essential and it's something that we're trying to put in place to avoid a future spike in oil prices," she said.
G7 finance ministers agreed to impose a price cap on Russian oil sales on September 2, threatening entities that provide services to ships, such as insurance, carrying oil sold at a higher price with sanctions.
The measure was proposed by the seven countries in a bid to slash Moscow's income and its ability to fund the special military operation in Ukraine. However, it is unclear if the proposed move will have any real impact on Russia as the Kremlin stated that it was not up to the US or any other country to decide what price will Moscow sell its oil at. Russian Energy Minister Nikolai Shulginov reiterated that Russia will not be selling oil abroad at its own expense and at the price set by western countries.
The West's war on Russian oil income comes at a time when crude's price tag is stuck around $100 per barrel and continues to drive inflation in the developed countries. The high oil prices prompted a spike in prices for fuel and all sorts of transportation services.