The best way to stabilize oil prices is to boost supply, and alternatives to Russian oil are available to the world, said Mathias Corman, the secretary-general of the Organization for Economic Cooperation and Development.
Speaking to “Squawk Box Asia” on Friday from the Group of 20 meeting of financial leaders in Bali, Indonesia, Cormann said that Russia’s war on Ukraine has imposed “a heavy burden on the world.”
“It’s leading 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, U.S. Treasury Secretary Janet Yellen said that a cap on Russian oil prices will be crucial to bringing down inflation. U.S. consumer inflation in June soared 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 across the world are feeling at the gas pump and the grocery store right now,” she said.
In response, Cormann said that the G-20 foreign ministers will be “having conversations” about imposing a price ceiling.
“Any measure to increase supply will bring down the price of oil and we will have the desired effect,” said the former finance minister for Australia.
“My message is, there are options available to the world in the context of an open global market economy … through increased production from other sources, we can make up some of that difference and we can help ensure that the price stabilizes at a more appropriate level.”
While Russia’s war of aggression has placed huge pressure on the world, he said, rising oil prices is just “one manifestation” of the “cost burden.”
“It’s really important that the rest of the world sticks together [and] works together to help soften some of that impact,” Cormann added.