Deputy Treasury Sec’y: Oil Price Cap Puts China ‘in a Better Position to Negotiate Lower Prices’ for Russian Oil

On Tuesday’s broadcast of Bloomberg’s “Balance of Power,” Deputy Treasury Secretary Wally Adeyemo stated that the price cap on Russian oil will help countries like China that are still buying Russian oil and not taking part in the price cap by putting them “in a better position to negotiate lower prices with Russia.” Which will undercut Russia’s oil revenues.

Host David Westin asked, “There are some nations that conspicuously are not participating in the sanctions, and I’ll name just three of them: India, Indonesia, and China. Does the price cap work if those countries are still willing to buy Russian oil? Won’t it just redirect it to those nations?”

Adeyemo answered, “So, the reason the price cap works, even if they don’t necessarily join the coalition is because, ultimately, we share the same incentives. All three of those countries want to pay as little as possible for Russian oil. And over the weekend, I was encouraged to see a message from the petroleum minister of India saying that they’re considering joining, but even if countries decide not to join, by knowing how much the price cap coalition is willing to pay, they’re going to be in a better position to negotiate lower prices with Russia. Our ultimate goal here is to reduce Russian revenues. And if countries outside of the coalition are paying less for Russian oil going forward, that’s going to reduce the revenues. If countries are buying oil through the price cap coalition, that’s going to reduce Russia’s revenues. And all of this is in service of making Russia’s choices harder about propping up their economy or paying to fund their unjustifiable war in Ukraine.”

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