The global price of oil could surge by 40% to around $140 per barrel if a proposed price cap on Russian oil is not adopted, along with sanction exemptions that would allow shipments below that price, a senior U.S. Treasury official said on Tuesday.
U.S. Treasury Secretary Janet Yellen will discuss implementation of the proposed oil price cap with Japanese Finance Minister Shunichi Suzuki when they meet later on Tuesday, the official said.
The goal was to set the price at a level that covered Russia's margin cost of production so Moscow is incentivized to continue exporting oil, but not high enough to allow it to fund its war against Ukraine, the official said.
Japanese officials had expressed concern about the price cap being set too low, but had not rejected a potential price range of $40 to $60 per barrel outright, the official said.
