Putin says Russia might reduce oil manufacturing over West’s ‘silly’ worth cap By Reuters

By Vladimir Soldatkin and Man Faulconbridge

MOSCOW (Reuters) -Russia, the world’s largest exporter of power, might reduce oil manufacturing and can refuse to promote oil to any nation that imposes the West’s “silly” worth cap on Russian oil, President Vladimir Putin mentioned on Friday.

The Group of Seven main powers, the European Union and Australia final week agreed to a $60 per barrel worth cap on Russian seaborne after EU members overcame resistance from Poland.

“As for our response, I’ve already mentioned that we merely won’t promote to these international locations that make such choices,” Putin instructed reporters within the Kyrgyz capital, Bishkek.

“We’ll suppose, possibly, even a couple of attainable, if needed … discount in manufacturing.”

Putin, who guidelines the world’s second largest oil exporter after Saudi Arabia and the biggest gasoline exporter, mentioned Russia had a manufacturing settlement with different members of the OPEC+ oil producers’ membership, so such a drastic step was nonetheless solely a chance.

“We’re desirous about this, there aren’t any options but. And concrete steps can be outlined in a decree from the president of Russia that can be launched within the subsequent few days,” Putin mentioned.

Promoting oil and gasoline to Europe has been one of many foremost sources of Russia’s international foreign money earnings since Soviet geologists discovered oil and gasoline within the swamps of Siberia within the many years after World Struggle Two.

White Home spokesman John Kirby (NYSE:) mentioned Putin’s menace was not sudden however that it stays to be seen what motion Moscow finally takes, telling reporters in a information briefing: “We’re not shocked by these feedback. It is really probably not new.”

Putin dismissed the West’s try to squeeze Russian funds, saying the $60 worth cap corresponded to the worth at which Russia was promoting oil.

“All of it boils all the way down to about this determine,” Putin mentioned. “So don’t fret concerning the finances.”

The worth for Urals mix crude on Friday was round $53 per barrel, in keeping with Reuters knowledge.

The Kremlin chief cautioned that makes an attempt by the West to impose a worth cap would result in the worldwide collapse of the oil trade after which a catastrophic rise in costs.

“This can result in the collapse of the trade itself, as a result of the patron will all the time insist that the worth be decrease. The trade is already under-invested, under-funded, and if we hear solely to customers, then this funding can be decreased to zero,” Putin mentioned.

“All this can lead at some stage to a catastrophic surge in costs and to the collapse of the worldwide power sector. This can be a silly proposal, ill-conceived and poorly thought-out.”