A group of congressmen proposed replacing the oil price ceiling with other sanctions

The head of the House Financial Services Committee, Patrick McHenry, and three other congressmen proposed to US Presidential National Security Adviser Jake Sullivan to abolish the price ceiling on Russian oil and introduce a “comprehensive energy sanctions regime” against Russia, which, in their opinion, would more effectively limit Russia’s income . This was reported by press service financial services committee.

The press release says that congressmen condemned the decision of the administration of US President Joe Biden to introduce a ceiling on oil prices and called this measure erroneous. In their opinion, price restrictions imposed by the United States do not prevent Russia from financing military operations in Ukraine.

“At a time when the president is asking for additional funds for Ukraine, it is inexplicable why the administration continues to allocate billions of dollars every month to the needs of Moscow’s war machine. How can the right hand restore and the left destroy?” — the congressmen ask in a letter to Mr. Sullivan.

According to members of Congress, since the introduction of restrictions on prices for oil and petroleum products, Russia’s income from the export of raw materials amounted to $250 billion, with more than $57 billion received from China. The authors of the letter claim that some price ceiling advocates insist that alternative sanctions against the Russian energy sector will only lead to an increase in its income. Congressmen did not agree with this thesis and drew attention to Iran and Venezuela, which are under US sanctions and for which price restrictions have not been introduced.

Instead of a price ceiling, members of Congress are proposing that the US Treasury Department stop licensing Russian banks for operations related to the energy sector. They also supported tightening sanctions pressure on companies buying Russian oil.

From December 5, 2022, the European Union, G7 and Australia introduced a price ceiling on Russian oil of $60 per barrel. On February 5, 2023, the price ceiling for Russian petroleum products came into force. December 20, 2023 US Treasury Office of Foreign Assets Control (OFAC) updated Guidance on Compliance with Price Restrictions. In addition, Washington imposed sanctions against Hong Kong traders Bellatrix and Covart, Voliton from the UAE, as well as Sun Ship Management, which manages the transferred Sovcomflot oil tankers.

More details in the material “Tankers for inspection”.

Erdni Kagaltynov