Concerns Over Crude Oil Price Surge... Imposed Tariffs May Be Used for Ukraine Reconstruction
Smoke is rising from an oil storage facility in Bryansk, western Russia, near the Ukrainian border, following a fire on the 25th of last month (local time). [Image source=AP Yonhap News]
[Asia Economy Reporter Minwoo Lee] The United States is expected to discuss imposing a price cap and tariffs instead of halting Russian oil imports with the Group of Seven (G7) countries.
According to major foreign media on the 17th (local time), a U.S. Treasury Department official stated to a foreign media outlet that they plan to discuss such measures with G7 countries. The idea is to maintain the supply of Russian crude oil in the oil market while preventing a sharp rise in prices and reducing Russia's revenue.
Earlier, the European Union (EU) considered banning imports of Russian crude oil in response to Russia's invasion of Ukraine, but concerns are growing among some Eastern European countries.
The official explained, "Many countries want to stop purchasing Russian crude oil as soon as possible, but this could cause oil prices to surge," adding, "We are considering tariffs and other measures to protect the global economy from additional damage caused by high oil prices." The official also noted that the tariffs collected could be used for Ukraine's recovery and reconstruction.
This plan reportedly emerged after Italian Prime Minister Mario Draghi met with U.S. President Joe Biden and proposed ideas to curb soaring oil prices. At that time, Prime Minister Draghi suggested, "To set a cap on energy prices, oil-consuming countries should form a cartel or persuade the Organization of the Petroleum Exporting Countries (OPEC) to increase production."
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