U.S. Treasury's Adeyemo says $60 oil price cap will limit Russia's revenues

Reuters NEXT Newsmaker event in New York City
U.S. Treasury Department Deputy Secretary Wally Adeyemo attends the Reuters NEXT Newsmaker event in New York City, New York, U.S., December 1, 2022. REUTERS/Brendan McDermid

NEW YORK, Dec 1 (Reuters) - U.S. Deputy Treasury Secretary Wally Adeyemo applauded a European Union deal for a $60-a-barrel price cap on Russian oil exports on Thursday, saying this was within the range of discussed price levels and would limit Moscow's oil revenues.

Adeyemo told the Reuters NEXT conference that he believes that EU member countries will finalize the price cap agreement because they have consistently applied sanctions to punish Russia for its invasion of Ukraine.

The European Union tentatively agreed earlier on a $60 level to start the price cap, with a regular adjustment mechanism.

"It's in the range of prices that we've been talking about for a while in terms of creating and helping us do two things. One is reducing Russia's revenues. But the second one is making sure that we keep Russian barrels on the market," Adeyemo said.

He added that the price cap agreement "can accomplish those two goals and put us in a position where Russia's revenues come down while ensuring that people get access to reliable, cheap energy around the world."

Adeyemo said it was difficult to know how much Russia is earning from its oil exports, but even if some market prices are currently below the $60 price cap level, the mechanism will limit the upside of Russian oil prices and further shrink Russia's economy in 2023.

"And the key thing to remember is that we're starting at $60 but we have the ability to...further use the price cap to constrain Russia's revenues over time."

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Writing by David Lawder, additional reporting by Andrea Shalal; Editing by Chizu Nomiyama

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