Russia says it may cut oil output up to 7% over price cap

Russia may cut oil output by 5 per cent to 7 per cent 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 December 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.

Russian President Vladimir Putin said on Thursday he would issue a decree early next week on Moscow's actions in response to the price cap.

Novak said the decree would ban sales of oil and oil products to countries that join the price cap and companies that demand its observance.

He also praised the work of the Opec+ group of leading global oil producers, which includes Russia, saying that the oil price is likely to remain in current range of $70-$100 per barrel next year barring the emergence of unforeseen events.