The Russian Federation is reducing oil production in response to the price ceiling from the G7 countries, prices have jumped
Russia announced a reduction in oil production by 500,000 barrels per day (b/d) in response to the introduction of a price ceiling on it by the G7 countries, the markets reacted by increasing prices.
It is reported BloombergRussian mass media Merchant.
Thus, on Friday, Russian Deputy Prime Minister Alexander Novak announced that in March, Russia will “voluntarily reduce oil production by 500,000 barrels per day.” He stated that he considers the price ceiling mechanism for Russian oil and oil products to be “interference in market relations” and that the Russian Federation will not sell oil to those who “directly or indirectly adhere to the price ceiling.”
In the background of the news, oil brands Brent grew by 2.6% traded above 86 dollars per barreland the American West Texas Intermediate (WTI) exceeded 80 dollars per barrel.
Note that the price ceiling for Russian oil is currently implemented by the G7 countries deprived Russian Federation 8 billion dollars of income in January. It is oil revenues that make up the main part of the revenues of the Russian budget.
Before the production cut announcement, oil prices were already on track for their biggest weekly gain since mid-January. This was facilitated by Saudi Arabia’s confidence in the recovery of oil demand in China, as well as supply disruptions in Turkey, Norway and Kazakhstan.
Although since the introduction of energy sanctions against Russia, the country has been actively redirecting its raw material exports to more friendly Asian markets, they are unable to replace European ones either in terms of volumes or purchase prices.
We remind you:
Four days after the G7 capped Russian oil prices, some Russian oil is trading well below the threshold level, established for Moscow.
The G7 countries announced that they had agreed establish a “price ceiling” for oilwhich is exported from the Russian Federation by sea, at the level of $60 per barrel.
