US wants Russian oil to flow to world while limiting Moscow's revenue
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Treasury Secretary Janet Yellen said that "the objective is to limit the revenue going to Russia."
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Treasury Secretary Janet Yellen (source: Scott Mlyn, CNBC)
In a congressional hearing on Tuesday, Treasury Secretary Janet Yellen said that the United States wants Russian oil to flow to the world market to alleviate the global supply shortage while hoping at the same time to limit Moscow’s revenue from it.
"I think what we want to do is keep [a] portion [of] oil flowing into the global market to hold down global prices, and try to avoid a [price] spike that causes a worldwide recession," Yellen told the US Senate Finance Committee, adding, "But absolutely, the objective is to limit the revenue going to Russia. There are different ways, technically, of accomplishing that. But it's certainly a desirable strategy."
According to OilX, the Western-led ban on Russian oil following the war in Ukraine has weighed on Moscow's production of the commodity. The output in April averaged 10.05 million barrels daily, down from 11.01 million barrels per day in March.
Deputy Prime Minister Alexander Novak presented an optimistic outlook, saying that the production increased in May by 200,000 to 300,000 barrels daily and expecting a recovery in June.
Foreign Minister Sergei Lavrov said last week that Western sanctions on Russia would have no effect on the country's exports and expected growth in profits from energy shipments this year.
"Considering the price level that has been established as a result of the West's policies, we have suffered no budgetary losses," Lavrov said. "On the contrary, this year, we will significantly increase the profits from the export of our energy resources. Oil, generally speaking, is not subject to politics, there is a demand for it ... we have alternative sales markets, where we are already increasing sales.”
Last week, European Union leaders agreed in principle to cut the majority of Russian oil imports by the end of this year; however, Russia will seek other oil importers to replace the EU, according to the Permanent Representative of Russia to International Organizations in Vienna Mikhail Ulyanov.
