Novak: Russia will redirect or reduce oil production after setting the price cap
Deputy Prime Minister Alexander Novak confirmed that Russia will not supply oil to those countries that join the price ceiling mechanism. Supplies will be redirected to partners who adhere to market health. Russia may also cut oil production.
“Russia has provided its status as a reliable energy supplier in the world market and the market status of our international participants. In this regard, we do not propose to supply oil and oil products to countries that will be applied on the principle of rising prices with a decrease in reorientation to market-oriented partners or with a decrease in income,” Mr. Novak told reporters (quoted from “RIA News”).
On November 18, Bloomberg reported that the G7 countries intend to announce the level of the maximum price for Russian oil on November 23. On November 4, Reuters reported that the G7 countries and Australia had agreed to set a fixed price for Russian oil. At the same time, the approved ceiling is planned to be reviewed “as necessary”.
The establishment of a price ceiling for oil from Russia is planned as part of the eighth application package. On November 14, the European Commission announced that the device is ready to set ceiling prices, all the necessary tools are already available. The introduction of the ceiling for Russian oil is scheduled for December 5, for oil products – from February 5. The US Treasury has set the price at about $40-60 per barrel. Russia has repeatedly stated that it will not be annoying under such conditions.
The mechanism itself involves a ban on insurance of tankers that transport fuel at a price higher than the established one. 90% of the insurance market is subject to European legislation.
Read more about the situation with oil production in the context of price restrictions – in the material “Kommersant” “Oil to maintain volumes”