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Capping the price of Russian oil would lead to a deficit and higher prices, according to Moscow
A such measure “can only lead to a market imbalance, to a shortage of energy resources on the market, which, in turn, will lead to an increase in the prices” that European consumers will have to pay, “said the Deputy Prime Minister Russian Energy Commissioner Alexandre Novak, during an interview with the Russian television channel Rossiia-24.
G7 member countries agree on the principle of a cap on the price of Russian oil
At a summit of G7 member countries held this week, leaders pledged to develop a “mechanism” to cap the price of Russian oil globally. Objective: to deprive Moscow of a significant part of its oil windfall, thus trying to prevent Russia from using it to finance the war it is waging against Ukraine.
Difficult to do without Russian oil
“Risks” of a loss of oil revenues for Russia “obviously exist,” Kremlin spokesman Dmitry Peskov told Russian news agencies.
Emphasizing, however, that there was “no great excess of oil on the market” and that it was a “necessary product” whose need “is only going to increase”. While European countries have been striving since Russia’s invasion of Ukraine to reduce their own consumption of Russian hydrocarbons, Moscow’s exports have also increased to Asia. return to Europe in the form of a refined fuel, and with a price integrating the large margins operated by the refining sector.
Russian oil production almost back to pre-conflict level
It is in such a context that Alexander Novak indicated Thursday that Russia’s oil production had practically returned to its level before the start of the offensive in Ukraine, at some 9.9 million barrels per day.
“Our production has recovered from the fall in March and April. In June, we almost reached the level of February,” he said, adding that Moscow would strive to increase it further to meet the production quotas set for Russia by OPEC+. “Russia’s role in implementing the deal (announced by OPEC+ on Thursday) will be one of the most crucial,” he said.
Source: AFP
to summarize
While the member countries of the G7 pledged this week to cap the price of Russian oil, Vladimir Putin’s response was not long in coming.
Moscow thus warned Western countries on Thursday of the consequences that such measures would engender according to him. According to him, the establishment of such a mechanism would cause a “deficit” which would lead to soaring prices for European consumers. Understood: and social movements….
