U.S. Senators Propose Secondary Sanctions to Bolster Russian Oil Price Cap Plan

Democratic Senator van Hollen and Republican senator Toomey on Tuesday proposed that the Biden administration to use secondary sanctions on international banks as a move to strengthen the planned G7 price cap on Russian oil. The senators announced a framework for legislation to impose the secondary sanctions, which would target financial institutions involved in trade finance, insurance, reinsurance and brokerage of Russia oil and petroleum products sold at prices exceeding the cap.

Both senators are members of the Senate Banking Committee, which oversees sanctions policy.

The senators argue that if the secondary sanctions target banks, Russia’s ability to evade the price cap through deals with countries not participating in the G7 scheme would become harder.

Van Hollen said it is important to ensure the price cap to be uniformly applied and to achieve that, secondary sanctions are needed.

Toomey said the President should be given authorization to enforce price caps on anyone who buys Russian oil above the capped price.

Meanwhile, the Biden administration is reluctant to impose secondary sanctions, worrying that it would complicate relations with primary importers of Russian oil like China and India.

The U.S. Treasury has said that anyone who falsifies documentation or otherwise hides the origin or price of Russian oil would face consequences under the domestic law of jurisdictions implementing the price cap.

G7 announced its price cap plan this month to limit Russia’s lucrative oil export revenue in the wake of the invasion. Several countries have banned imports of Russian crude and fuel, but Moscow has managed to maintain its revenues through increased crude sales to Asia.

The U.S. Treasury Department believes the price cap will both deny Russia to fund its invasion of Ukraine and keep Russian oil in the market at lower price, reducing potential for price spikes. The Treasury also indicated that it will release guidelines regarding G7’s concern that Russian crude could be blended with oil from other nations to circumvent sanctions.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today

Subscribe to Top Insights Today

Subscribe to Executive Newsletter Top Insights Today

The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights

Join the ranks of global executives and subscribe to Top Insights Today

Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Automotive Giants Make Great Strides to Secure Battery Raw Materials

Two of the world’s biggest automakers, Ford and General Motors, signed direct deals with battery metal producers to step up efforts to secure supplies much needed for their electrification targets. GM announced three deals on Tuesday for raw material supplies needed for its electric vehicle (EV) fleet. Ford has also announced a list of suppliers less than a week earlier, a flurry of supply agreements which would be enough to manufacture 600,000 EVs annually. 

Germany to Make Constitutional Change to Accommodate €100 Billion Defense Budget

Germany’s Ministry of Finance announced a constitutional change will be made to allow the country to set out a credit-based special defense fund of €100 billion proposed after Russia’s invasion of Ukraine. 

Nikola and TC Energy to Cooperate on Hydrogen Production

Electric truck manufacturer Nikola has made an agreement with Canadian pipeline operator TC Energy on building a large scale hydrogen production hub to provide fuel for its vehicles. The companies will build two facilities in the United States and Canada to power Nikola’s fuel cell electric vehicles (FCEVs).  

Stay informed

error: This content is protected !!