Russia to reduce production under possible price cap: Novak

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Russian Deputy Prime Minister Alexander Novak affirms that Russia will not send oil and petroleum products to nations that use the price-cap approach; instead, Moscow will reroute supplies to market-oriented allies or limit production entirely.

"Russia confirms its status as a reliable energy supplier to the world market and the market status of our relations with partners. In this regard, we do not plan to supply oil and petroleum products to countries that will apply the principle of a price cap with the subsequent reorientation of supplies to market-oriented partners or with a production reduction," Novak said.

The top political figure warned that politicization of the energy sector can only lead to a scarcity of resources on the market; for example, the price cap on Russian oil.

"We believe that the politicization of the energy sphere can only lead to a shortage of resources and problems with energy supply. The price cap is just an example of unprecedented interference in the functioning of the oil market, which will inevitably lead to a drop in investments, a decrease in supply, and a shortage of oil supply and any other exchange-traded goods to which this mechanism can be applied in the future," Novak said.

Novak’s remarks came in light of the G7's recent decision to cap the prices of Russian oil in an effort to prevent Russia from profiteering from its oil revenues.

The cap is scheduled to be implemented in full force from December 5 on sea-borne oil shipments, with a second cap on oil products from February 5.

Putin: No gas, no oil, no coal, nothing

Russian President Vladimir Putin commented on the price cap attempts by stating that Russia will stop supplying oil and gas to countries that impose price ceilings. Capping prices, as some Western countries are considering, "would be an absolutely stupid decision," Putin told the Eastern Economic Forum in the Pacific port city of Vladivostok.

"We will not supply anything at all if it is contrary to our interests, in this case economic (interests)," he said. "No gas, no oil, no coal, no fuel oil, nothing." 

In his turn, Energy Minister Nikolay Shulginov confirmed that Russia refuses to supply any country with natural gas and oil below market price, rejecting the "price cap" idea floated by EU officials as an attempt to force a "cartel deal" on Moscow. The schemed plan is to push soaring energy prices even higher, Shulginov believes, suggesting that the EU leadership does not fully realize what it is doing, “They are no longer aware of what they are doing. Only making it worse for themselves."