Treasury Secretary Yellen warns of possible spike in gas prices this winter

Treasury Secretary Janet Yellen cautioned the nation on Sunday that gas prices may increase yet again this winter.

While speaking with CNN’s Dana Bash on “State of the Union,” Yellen warned of the possibility that gas prices could rise again due to the European Union largely halting Russian oil purchases this winter and banning provision of services that allow Russia to ship oil by tanker. “It is possible that that could cause a spike in oil prices,” Yellen said.

Yellen did go on to say that a possible western price cap was in the works to balance curbing Russian oil revenues helping fund its war in Ukraine, while maintaining a degree of access to Russian oil to attempt to “hold down global oil prices.”

“So, I believe this is something that can be essential,” she said. “And it’s something that we’re trying to put in place to avoid a future spike in oil prices.”

The Group of Seven nations, which includes the U.S., Canada, France, Germany, Italy, Japan and the United Kingdom, agreed to a price cap on Russian oil earlier this month, which would ban the provision “services which enable maritime transportation of Russian-origin crude oil and petroleum products globally.” Whilst an agreement is in place, there is no indication of what the cap will be.

The nations did say that the price would be agreed by “a broad coalition” of countries.

Russia, the world’s third-largest oil producer (the top two being the United States and Saudi Arabia), has threatened not to sell to nations that are involved in the oil cap, which could put further pressure on oil prices. Moscow also took the decision shut down a major gas pipeline to European nations, stating that the pipeline required essential maintenance.

According to transportation organization AAA gas prices in the United States have fallen to $3.71 per gallon.