Russia considers the use of the oil price ceiling instrument introduced by the EU to be non-market, is considering a mechanism to ban its use and is ready even to slightly reduce oil production if countries want to use it, Russian Deputy Prime Minister Alexander Novak said on the Rossiya 24 TV channel. . “We believe that this instrument is non-market, inefficient, grossly interfering with market instruments, contrary to all rules, the same WTO, for example. In our practice, we are not going to use price cap instruments. price cap instrument, no matter what level is set,” Novak said. He noted that the introduction of such a tool can only lead to market destabilization, energy shortages, lower investment, and in the future the mechanism may also affect other goods or countries. “We will sell oil and oil products to those countries that will work with us on market terms, even if we have to cut production somewhat,” the Deputy Prime Minister said.
The oil market is now in a better state than it was two months ago, but there are still many uncertainties – high inflation, sovereign debt, as well as the outbreak of COVID-19 in China, he added commenting on OPEC +'s decision today to maintain oil production quotas. Novak noted that during today's OPEC + meeting, it was emphasized that the “preventive decision” to reduce quotas by 2 million barrels per day, taken in October 2022, “was absolutely correct, aimed primarily at stabilizing the market.” “And we stressed today that the market is in a better state than two months ago, although many uncertainties, of course, we noted today, including high inflation in many countries, high levels of sovereign debt, tightening of monetary policy by many countries. An important point is the recurring outbreaks of COVID-19 in China, the largest consumer of energy resources,” the vice premier said.
Novak also confirmed that the next meeting of the OPEC + monitoring committee will be held on February 1, and ministerial meeting – in June next year, and if necessary, an extraordinary meeting can be held.
As reported, on the night of Saturday to Sunday, the EU published a decision – the price ceiling for Russian oil was approved at $60 per barrel. The mechanism comes into force on December 5.