Ms. Yellen has floated the possibility of Western countries imposing a price cap on Russian oil, offering the idea as the European Union moves toward an embargo on Russian oil. In comments to reporters Thursday between meetings of finance ministers of the Group of Seven major nations, Ms. Yellen said the potential price cap would be set by a cartel of buyers.
"You need a significant cartel in order to accomplish that, maybe the EU alone wouldn't be sufficient," she said. "The idea of using sanctions, secondary sanctions has come up. The idea of tariffs instead of price caps could be an alternative sort of approach."
Imposing sanctions to shape how China or India can purchase Russian oil would mark a major new step in efforts by the U.S. and its allies to weaken the Russian economy. Ms. Yellen said she and her global counterparts are discussing ways to cut into Russian energy revenues while not putting too much strain on the global economy.
"The objective is: Keep some Russian oil flowing to the market to hold down global prices so we don't have undue negative impacts," Ms. Yellen said, adding that the move could create "stagflationary type of shocks."
"So it's a good objective," she said, "and I think everybody endorses it. Nothing is really crystallized."
Ms. Yellen said conversations on the various discussions are in their early stages.
"It's not even clear that we're going to go this route," she said "I think a lot of people including me find it appealing from a general economic point of view. Actually making it operational is challenging and all those issues have not yet been worked through."