Oil prices rose on February 10 after the Kremlin said it would cut oil production by about 5 percent in March in response to Western sanctions and a G7 price cap on Russian oil.
Deputy Prime Minister Alexander Novak said Russia would “voluntarily reduce production by 500,000 barrels per day.”
“As of today we are selling the entire quantity of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the ‘price cap’, Novak said in a statement.
brent crude prices Rose $84 to $86 a barrel in morning trade. Russia is the world’s second largest exporter of crude oil.
America banned Russian crude imports in December; Earlier this month, it also banned Russian oil products such as diesel and gasoline. Both measures are complemented by price caps on global trade of Russian oil, enforced by the G7, the European Union and Australian shipping and insurance firms, which refuse to facilitate sales above cap levels.
Russia’s significant fossil fuel income took a hit As a result of the sanctions, buyers in Asia and elsewhere take advantage of price caps to negotiate lower prices for Russian crude.
Oil traders previously warned that Russia could cut output in an effort to create global security of supply concerns and prop up prices.
Simone Tagliapietra, senior fellow at the Bruegel think tank, said the move was “an early sign that Russia may be trying to weaponize oil supplies after last year’s failed attempt to weaponize natural gas.”