The best way to stabilize oil prices is to increase supply, and alternatives to Russian oil are available to the world, said Mathias Corman, general secretary of the Organization for Economic Co-operation and Development.
In a speech to “Squawk Box Asia” on Friday from the Group of 20 meeting of financial leaders in Bali, Indonesia, Cormann said that Russia’s war against Ukraine has imposed “a heavy burden on the world.”
“It leads to slower growth, higher inflation, higher energy prices, higher food prices, food security challenges, so the world would clearly be better off if Vladimir Putin stopped this war.”
On Thursday, US Treasury Secretary Janet Yellen said a cap on Russian oil prices would be crucial in bringing inflation down. US consumer inflation rose in June to a 40-year high of 9.1%, according to data released this week.
“A price cap on Russian oil is one of our most powerful tools to address the pain that Americans and families around the world are feeling at the gas station and the grocery store right now,” she said.
In response, Cormann said G-20 foreign ministers would “have talks” about imposing a price cap.
“Any measure to increase supply will bring down the price of oil and we will have the desired effect,” said the former Australian finance minister.
“My message is that there are opportunities for the world in the context of an open global market economy… through increased production from other sources we can even out some of that difference and we can help ensure that the price stabilizes to a more appropriate level. “
While Russia’s war of aggression has put enormous pressure on the world, he said, rising oil prices are just “one manifestation” of the “cost burden”.
“It is very important that the rest of the world stays together [and] working together to help mitigate some of this impact, “Cormann added.