‘Moscow will not export oil subject to Western price ceiling’ says top Putin official

THE Russiathe second country in the world in exports oilwill not sell oil subject to a Western price ceiling even if it has to cut output, President Vladimir Putin’s closest energy ally said today.

The Group of Seven (G7) and Australia pagreed on Friday to a price ceiling for seaborne Russian crude at $60 a barrel after European Union member states overcame resistance from Poland.

The movement of the West is an attempt to punish Putin about the war in Ukraine.
Russian Deputy Prime Minister Alexander Novak said today that the West’s move is a blatant intervention that goes against the rules of free trade and will destabilize global energy markets by causing supply shortages.

“We are working on mechanisms that will prohibit the use of the price cap tool, regardless of what level it is set at, because that intervention could further destabilize the market,” said Novak, who is the Russian government official responsible for the country’s oil, gas, nuclear power and coal .

“We will sell oil and oil products only to those countries that will work with us based on purchase terms, even if we are forced to reduce production a little,” he added.

Novak said the Western ceiling could disrupt commodity markets and affect countries other than Russia.

It is unclear what, if any, the immediate impact of the western cap will be on Russian oil flows because Brent’s discount to Russian blends has widened considerably.
Urals blend was trading around $61.3 a barrel – just over a dollar above the ceiling. Brent futures closed at $85.57 on Friday.

Selling oil and gas in Europe is one of the main imgs of foreign exchange for Russia after Soviet geologists discovered oil and gas in the Siberian swamps in the decades following World War II.

A img, who asked not to be named because of the sensitivity of the situation, told Reuters the measure was prepared to ban Russian companies and traders from interacting with countries and companies guided by the cap.

In essence, such a measure will ban the export of oil and petroleum products in countries and companies that apply it.

After ordering the military operation in Ukraine on February 24, Putin says the United States has launched an economic war against Russia with the toughest sanctions in modern history, warning that the West will face an energy crisis.

In September Putin warned the West that cannot cut off energy supplies if price caps are imposed, lcausing Europe to “freeze” like a wolf’s tail, as a well-known Russian fairy tale says.

Russia may have access to enough tankers to move most of its oil beyond the reach of a new G7 price cap, industry players and a US official told Reuters in October, underscoring the limits of the most ambitious plan yet today to cut Moscow’s wartime revenues.

Source: News Beast

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