MOSCOW (AP) — Russia has announced that will cut oil production by 500,000 barrels per day next month after Western countries capped the price of its crude .
“As of today, we fully sell all our crude output, but as we stated before, we will not sell oil to those who directly or indirectly adhere to the ‘price ceiling,’” Deputy Prime Minister Alexander Novak said in remarks carried by Russian news agencies.
Analysts have said one possible Russian response to the cap would be to slash production to try to raise oil prices, which could eventually flow through to higher gasoline prices at the pump as less oil makes it to the global market.
International benchmark Brent crude traded 1.5% higher Friday at $85.75 per barrel.
The Group of Seven major democracies have imposed a $60-per-barrel price cap on Russian oil shipped to non-Western countries. The goal is to keep oil flowing to the world to prevent price spikes that were seen last year.
The cap is enforced by barring Western companies that largely control shipping and insurance services from moving oil priced above the limit.
The OPEC+ alliance of oil producers, which includes Russia, tried to boost oil prices with an October announcement that it would cut production by 2 million barrels per day, only to see prices fall below $80 per barrel by December