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US legislators want a say in the forthcoming price cap on Russian oil. Republican Sen. Pat Toomey and Democratic Sen. Chris Van Hollen announced a sanctions bill that has broader powers to enforce the proposed price cap on Russian oil than what the Biden administration is currently advocating. The senators’ proposal threatens to block companies from the US financial system if they buy oil priced above the cap, a structure known as “secondary sanctions” that have been controversial in the past when used in other sanctions programs, such as that on Iran. The legislation is meant to act “as a complement to the administration’s effort, a backstop,” Van Hollen said in a Senate Banking Committee hearing Tuesday. But Treasury Department officials have seemed comfortable with the idea that Russia may be able to sell some oil above the cap. They’ve largely framed the idea that Russia is forced to sell at steep discounts as the price cap looms as a success. Their objective is to reduce revenues — and steep discounts do that. The Biden administration is also balancing its concerns over Russia’s revenues with those of oil market supply.

Topics:
Policy and Regulation, Sanctions
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