MARRAKECH: In a recent statement, U.S. Treasury Secretary Janet Yellen emphasized the significant impact of the G7-led price cap on Russian oil over the past 10 months, highlighting the sharp reduction in Russian revenues. Stressing the critical need to maintain and escalate severe costs on Russia due to its ongoing conflict in Ukraine, Yellen spoke during a news conference at the International Monetary Fund and World Bank meetings in Marrakech, Morocco.
Yellen reiterated that the war in Ukraine remains a major obstacle for the global economy. While acknowledging that the IMF’s updated outlook indicates a better-than-expected state of the global economy compared to last year’s projections, she underscored the necessity of closely monitoring potential downside risks.
Addressing concerns about slowing growth in certain countries, including China and the euro zone, Yellen expressed confidence that there are currently no signs of widespread destabilizing spillovers affecting the global economy. However, she emphasized the need to remain vigilant and proactive in the face of evolving economic conditions.
The recent deadly attack on Israel by Hamas gunmen from the Gaza Strip was strongly condemned by Yellen. Despite the tragic event, her prepared remarks did not delve into its potential implications for the global economy.
Having visited Ukraine in February, Yellen reaffirmed the Biden administration’s commitment to ensuring continuous support for Ukraine and stressed the importance of uninterrupted aid to the country during these challenging times. She emphasized the administration’s determination to work with Congress and maintain bipartisan support to provide the necessary assistance to help Ukraine prevail in its conflict.
Addressing political challenges within the House of Representatives, particularly Republican infighting affecting budget negotiations, Yellen acknowledged concerns about potential disruptions in aid to Ukraine due to congressional chaos. However, she assured that efforts would persist to mitigate the impact of Russia’s war in Ukraine, particularly on food security, and work in collaboration with a global coalition to deprive Russia of the funding required to sustain the conflict.
Yellen commended the effectiveness of the price cap on Russian oil in significantly reducing Russian revenue over the past 10 months while stabilizing energy markets. She emphasized that global energy prices have remained relatively stable, compelling Russia to either sell oil at a discount or allocate substantial resources to its alternative ecosystem.
The G7 countries imposed sanctions in December, restricting services facilitating Russian oil exports when prices exceed $60 a barrel, aiming to curb Russia’s financial capabilities. However, critics have raised concerns about Russia potentially evading the cap using a “ghost fleet” of older tankers.
Yellen also voiced support for taxing windfall proceeds from Russian sovereign assets immobilized in specific clearinghouses and utilizing the funds to support Ukraine. She emphasized the imperative to persistently escalate the costs imposed on Russia and continue international efforts to hold Russia accountable for the damage caused.
