Russia might cut oil production by 500-700,000 barrels a day in early 2023, in response to the EU, G7 and Australia introducing a price cap on Russian black gold, a report said. Russian Deputy Prime Minister Alexander Novak said on Friday.
“At the beginning of next year, we might make a reduction (in production) of 500-700,000 barrels per day, for us it’s around 5-7%,” said Mr. Novak, in charge. Energy, quoted by the official TASS news agency.
At the beginning of December, the 27 countries of the European Union, the G7 and Australia had agreed on a maximum price of 60 US dollars for crude oil of Russian origin transported by sea, in order to limit the income from Moscow to finance its military offensive in Ukraine.
Thus, only oil sold by Moscow at a price equal to or less than 60 dollars can continue to be delivered. Beyond this ceiling, it will be prohibited for companies to provide services allowing maritime transport (freight, insurance, etc.).
The stated objective of this new Western sanction is to dry up part of the colossal income that Moscow derives from the sale of its hydrocarbons and thus reduce its ability to finance its military intervention in Ukraine.
A few days following the introduction of the Russian crude price cap, President Vladimir Putin threatened the West to “cut production” of Russian oil “if necessary”, denouncing a “stupid decision”.
