Siluanov: Russia will look for new oil markets even with rising costs

Russia will not supply oil under contracts that set price limits and will look for new markets away from the West, declared Russian Finance Minister Anton Siluanov in an interview with Al-Sharq.

Moscow will look for new markets for oil away from Western countries, the costs of alternative logistics routes may increase, but such supplies will not be subject to the price ceiling set by the European Union, Siluanov said. He admitted that Russia might have to reduce production volumes.

“Now we see that our companies and oil companies are redirecting their supply lines from the west to the east and to other countries. We are looking for new consumers of oil, as demand will increase,” the minister said, adding that the price ceiling for Russian oil “will certainly lead to market distortions.”

The official also said that Western sanctions have affected Europe as much as Russia, and the US is increasing oil and gas supplies to the EU.

Siluanov recalled the freezing of Russian funds abroad and noted that the Russian Federation is switching to trade settlements in national currencies, which “creates some security and stability.” He called the Chinese and Indian economies important for the country, which can replace the European markets. The minister also pointed to the lack of prospects for the return of assets confiscated by the West, but expressed hope that the parties would start negotiations on this issue.

On December 5, the price ceiling for Russian oil agreed by the European Union in the amount of $60 per barrel came into force. In addition to the EU countries, the G7 countries and Australia also joined the ceiling. Russian President Vladimir Putin said that the decree on the response to the oil price ceiling would be signed on December 26 or 27. According to him, Russia has nothing to lose from the imposed ceiling on oil prices.

December 19 EU also agreed and a gas price limit of 180 euros per 1 MWh, which corresponds to $1,975 per 1,000 cubic meters. m. The ceiling will come into force on February 15, 2023. On December 22, Putin signed a decree according to which “Gazprom”and its affiliates cannot fulfill obligations to foreign companies that are associated with countries that commit unfriendly actions against the Russian Federation. The Kremlin reported that the presidential decree is not Russia’s response to the introduction of EU oil and gas price ceilings.