Russia may cut oil output by 5%-7% in early 2023, as it responds to price caps on its crude and refined products, and halt sales to the countries that support them, Deputy Prime Minister Alexander Novak told state television on Friday.
Detailing for the first time the Russian response to the price caps introduced by the West over Moscow’s invasion of Ukraine, Novak said the cuts could reach 500,000-700,000 barrels per day (bpd).
He also said that despite Europe’s efforts to cut reliance on Russian oil and gas, energy exports from Russia are in demand worldwide and Moscow has been diversifying its buyers.
Novak said it would be difficult to provide for global economic development without Russian energy, and predicted possible gas shortages in Europe, which has introduced restrictions on gas prices, as well as on oil.
On oil, the European Union, G7 nations and Australia introduced a $60 per barrel price cap from Dec. 5, in addition to the European Union’s embargo on imports of Russian crude by sea and similar pledges by Britain, Canada, Japan and the United States.
“We believe that in the current situation, it is even possible to take risks of lower production rather than be guided by the selling policy regarding the price caps.
Today it is $60, tomorrow it can be anything, and getting dependent on some decisions made by unfriendly countries is unacceptable for us,” Novak said.