In March, Russia plans to voluntarily reduce oil production by 500 thousand bpd, Deputy Prime Minister of the Russian Federation Alexander Novak told reporters.
"As of today, we fully sell the entire volume of oil produced, however, as it was announced before, we will not sell oil to those who directly or indirectly adhere to the principles of the 'price ceiling,'" he said.
"In this regard, Russia will voluntarily reduce production by 500,000 bpd in March. This will help restore market relations," Novak added.
Novak's spokesman clarified that the production cut will affect only oil, not including gas condensate. An industry source told TASS that the production cut will be counted from the actual production level, not from Russia's quota under the OPEC+ deal. He pointed out that Russia made this decision on its own, there were no consultations with OPEC+.
"The decision was made by Russia unilaterally, there was no consultation with OPEC+," he said.
The deputy prime minister noted that the "price ceiling" mechanism could affect shortages of oil and products in other sectors.
"In the future, it may not only lead to a decreased investment in the oil sector and, consequently, oil shortages in the future, but also be spread to other sectors of the world economy with similar consequences," Novak said.
Russia sees the mechanism of "price ceiling" in the sale of Russian oil and petroleum products as interference in market relations and continuing destructive energy policy of the collective West, he added.
"As one of the steps to level the threat to the world oil market, Russia has banned direct or indirect use of references to any illegitimate restrictions in oil supply contracts," the deputy prime minister reminded.
On December 5, 2022, the EU embargo on maritime oil supplies from Russia came into force, the G7 countries, the EU and Australia have introduced "price ceiling" on Russian oil delivered by sea at $60 per barrel for their subordinate ships and territories. And on February 5, 2023, similar restrictions on supplies of petroleum products from Russia came into force. The size of the "ceiling" was set at $100 and $45 per barrel, depending on the category of oil products.
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Based on materials from TASS