Moscow Working Out Mechanisms To Disable Oil Price Cap - Novak

VIENNA (Pakistan Point News / Sputnik - 04th December, 2022) Russia is devising mechanisms to render Western price cap on its oil inapplicable, regardless of the cap's level, Russian Deputy Prime Minister Alexander Novak said on Sunday.

"We are not going to use price cap instruments in our practical dealings. To this end, we are now working on mechanisms to prohibit the use of price caps, no matter what level will be set, because we believe such interference can only lead to further destabilization of the market, shortages of energy resources and sagging investment," Novak told the Rossiya 24 broadcaster, adding that it may affect not only oil but also other commodities on the market and concern both Russia and other nations.

The senior official reaffirmed that Russia views the price cap on its oil as an ineffective instrument that "breaches all rules, including the WTO."

"We will sell oil and petroleum products to those countries that will work with us on market terms, even if we have to trim production," the deputy prime minister said.

Nevertheless, the global oil market is now in a better condition than two months ago, although some uncertainties persist, including soaring inflation, high levels of national debt, tighter monetary policies across nations and recurrent COVID-19 outbreaks in China, Novak said.

On Friday, the European Union reached an agreement on setting a price cap on Russian oil at $60 per barrel. The cap will be reviewed every two months to remain at 5% below International Energy Agency benchmark. The G7 nations and Australia also agreed that same day to set a $60 price ceiling on oil from Russia.