Putin threatens to cut oil production after “stupid” price cap imposed by the West

Russia, the world’s biggest energy exporter, could cut its oil production and refuse to sell it to any country that imposes the “stupid” Western price cap on Russian crude, the president said Friday. Vladimir Putin.

The Group of Seven Major Powers (G7), the European Union and Australia agreed last week to cap the price of Russian seaborne crude oil at $60 a barrel, after EU members overcame resistance from Poland.

“As for our reaction, I have already said that we will simply not sell to those countries that make such decisions,” Putin told reporters at a news conference in Bishkek, the Kyrgyz capital.

We will perhaps even think about a possible, if necessary (…) reduction in production.”

Putin, who rules the world’s second-biggest oil exporter after Saudi Arabia and the biggest gas exporter, said Russia had a production deal with other OPEC+ members so such a drastic move was still only a possibility. .

“We are thinking about it, there are no solutions yet. And concrete measures will be outlined in a decree of the President of Russia that will be released in the coming days,” Putin said.

The sale of oil and gas to Europe has been a major source of foreign exchange earnings for Russia since Soviet geologists found oil and gas in the Siberian swamps in the decades after the war. Second World War.

Putin dismissed the West’s attempt to squeeze Russian finances, stating that the $60 price ceiling corresponded to the price at which Russia sold oil.

“Everything comes down to this figure,” Putin said. “So don’t worry about the budget.”

The price of Ural blend crude was around $53 a barrel on Friday, according to Reuters data.

The Kremlin chief warned that attempts by the West to impose a price cap would lead to a global collapse of the oil industry and then a catastrophic rise in prices.

“This will lead to the collapse of the industry itself, because the consumer will always insist that the price be lower. The industry is already under-invested, under-financed, and if we only listen to consumers, then this investment will drop to zero,” Putin said. .

“All of this will eventually lead to a catastrophic rise in prices and the collapse of the global energy sector. This is a stupid, ill-conceived and ill-thought-out proposition.”