DAKAR, Jan 21 (Reuters) – Western countries are working to establish price caps for Russian refined petroleum products to ensure a continued flow of Russian diesel, but markets are complex and there is a chance things may not go to plan, the finance minister said. Janet Yellen. said:
The Group of Seven countries and Australia have imposed Russian oil prices since December 5, banning the use of Western-supplied marine insurance, financial and other services for cargo above $60.
They are now finalizing two separate price caps on Russian petroleum products such as diesel and fuel oil, which will take effect on February 5, as well as an EU ban on diesel imports, Yellen told reporters in Dakar, Senegal.
One would cover high-value products that typically trade at a premium to crude, while the other would cover low-value products such as fuel oil, he told reporters traveling with him in Africa.
Yellen said setting new price caps was “more complicated” than for crude, given the range and price structure of different refined products, as well as the importance of ensuring continued supplies of Russian diesel to the market.
“It’s more complicated, but we’ve worked hard to figure out how to achieve the same goals” as with a broader cap on Russian crude, he said.
“You know, there’s always the potential that things might not go according to plan, but we’ve studied these markets very carefully and we believe we’ll come out with a set of caps that will achieve the same results that we did.” so far with crude oil,” he said, adding that they could still make adjustments over time.
Although the first oil price cap only went into effect on Dec. 5, it has been successful so far, Yellen said, citing Russia’s decline in crude prices.
“They’ve expressed concern about revenues, and we’ve seen no sign of Russia keeping oil off the market,” he said.
Reporting by Andrea Shallal Editing by Nick Zieminski
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