Yellen warns ‘wary’ Chinese banks that US sanctions are still a real risk

US Treasury Secretary Janet Yellen said on Friday that the US was looking at further sanctions on “dark fleet” tankers and would not rule out sanctions on Chinese banks as it seeks to reduce Russia’s oil revenue and access to foreign supplies to fuel its war in Ukraine.

Yellen said the US and its allies also could consider lowering their US$60-per-barrel oil price cap on Russian oil, which prohibits Western insurance and maritime services on cargoes above that level.

The Treasury had already sanctioned individual tankers and their owners for operating above the price cap and could do more in this area, Yellen added, suggesting additional measures in the five weeks before she leaves office.

“There are a number of possibilities here. We don’t preview sanctions, but we’re always looking at oil revenues and if we can find ways to further impair Russian oil revenues, that would, I think, strengthen Ukraine’s hand. That remains on our list,” Yellen said.

Earlier this week, Yellen said softness in the oil market presented an opportunity for more sanctions. Benchmark Brent crude traded at US$74.50 per barrel on Friday, down from US$85.57 when the US$60 cap was set in December 2022. President Joe Biden’s administration has been racing to shore up support for Ukraine before president-elect Donald Trump takes office on January 20, given the Republican leader’s frequent complaints about the cost of US support for Ukraine.

US Treasury officials continue to have conversations with their Chinese counterparts on efforts to detect financial institution activity that could be aiding transactions related to Russia’s war effort. Yellen said these discussions had been aided by efforts to rebuild US-China economic and financial communications over the past two years.