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Russia Won’t Suffer Losses After West Imposes Oil Price Cap No Matter What - Putin

Russia Won’t Suffer Losses After West Imposes Oil Price Cap No Matter What - Putin
folder_openRussia access_timeone year ago
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By Staff, Agencies

Russian President Vladimir Putin addressed the economic issues on Friday as he commented on the western sanctions limiting the price of Russian oil.

Noting that the cap, introduced by the G7, the EU and Australia, won't affect Russia at the moment, Putin stressed that "The imposed cap corresponds with the prices at which we sell today. In this sense, the decision does not affect us in any way. To be honest, it is not important," Putin said at a press conference following his visit to Kyrgyzstan. "We will not suffer losses – no matter what."

He warned, however, that such a step may undermine global energy markets, resulting in an oil industry collapse worldwide if consumers are able to dictate prices.

“Following some harmful non-market decision would be stupid for everyone, including the consumers; because they must realize - if they will insist on prices that are pleasant to them, even if they achieve this, and the prices will go down, investments will be reduced to zero. In the end, prices will skyrocket, hitting those who offer such solutions," he noted.

“As for the good results [in the Russian economy], it could have been better, we would like it to be better. The truth is, however, that the forecasts suggested a 20% economic recession in Russia; there is a recession, but it is at 2.9%. That's, of course, a huge difference, and we understand that those who predicted such a development of events for us made a major mistake," Putin said.

The Russian leader noted that, despite a certain slowdown in the economy, "the situation is indeed better than in many other countries in a number of ways," since Russia shows better inflation numbers than Europe.

Putin also noted that Moscow would consider cutting oil output as a viable response to the price cap introduction.

"As for our reaction, I have already said that we simply won't sell [oil] to the countries that make such decisions. Maybe, we will even consider the possibility - I'm not saying that it is decided - we will consider, if necessary, the possibility of reducing [oil] output. We have an agreement with OPEC+ on a well-known production target," he added.

Since 2021, energy prices have been surging globally, but the situation deteriorated after February 2022, when the US, the EU, Britain, and their allies introduced sanctions on Moscow, responding to Russia's military operation in Ukraine. As a result of the sanctions, gas prices have accelerated their growth, resulting in an energy crisis in Europe.

Nevertheless, G7 nations and the EU [which as a bloc is closely associated with the group], as well as Australia, imposed a price cap on Russian oil, setting it at $60 per barrel.

The cap, which came into effect on December 5, will be reviewed every two months to remain at 5% below the International Energy Agency benchmark. Moscow lambasted the price cap as an attempt to manipulate “the basic principles of free markets,” noting that Russia won't sell oil to countries that adopt it.

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