The Price Cap on Russian Oil

In the months since Russia invaded Ukraine, world leaders have struggled to implement a global response that punishes Russia for its aggression, while simultaneously minimizing the war’s impact on energy prices. In the United States, the Department of the Treasury has been at the center of this effort. Officials there have been negotiating with international partners over a proposal to implement a price cap on Russian oil. Their goal? To reduce Russia’s energy revenue while keeping vitally needed oil on the market.  A price cap would allow those transporting Russian oil to use western services if buyers pay below a set price. But some experts are skeptical. Can the United States really punish Russian aggression while protecting the economies of consumer countries? What are the chances of Russian retaliation? And how would a global price cap affect energy prices for American consumers in the months ahead? This week, we’re airing a conversation between host Jason Bordoff and Wally Adeyemo at the recent Columbia Global Energy Summit.   As deputy secretary of the Treasury, Wally has been at the center of the Biden Administration’s Covid recovery effort, its response to Russian aggression, and its stewardship of the American economy.  Prior to taking over as deputy secretary, Wally served as deputy national security adviser for International Economics and deputy director of the National Economic Council for the Obama Administration. He was also the first chief of staff of the Consumer Financial Protection Bureau.  Jason and Wally discuss the price cap proposal, the outlook for energy markets, and how the Department of the Treasury is using its economic policy levers to address the climate crisis.