U.S. Treasury chief backs $60 price cap on Russian oil

On Thursday, the European Union (EU) proposed a cap on Russian oil prices of $60. U.S. Treasury Undersecretary Wally Adeyemo supported the proposal.

According to Adeyemo, such a price will help to effectively achieve two goals at once. Russia's export revenues would decrease significantly, but at the same time Russian oil wouldn’t disappear from the market altogether.

In turn, analysts at Bloomberg Intelligence have concerns about the restrictions. They believe that, on the one hand, it will be difficult to adhere to such prices, and on the other hand, it may exacerbate the deficit in the oil market. Russia may begin to take retaliatory measures, which will lead to an increase in crude oil prices.

Oil Price writer Irina Slav also has some concerns about the restrictions. She believes that not all EU countries will agree to the proposed price cap. While Poland and the Baltic states are likely to demand a lower price, Greece and Cyprus, even with the current level of restrictions, could lose a significant portion of their maritime service industries. The EU may be forced to impose a complete embargo. Thus, Russia's revenues from oil exports to other countries will only increase as oil prices rise.