The Ministry of Energy said that Russia will not sell oil at any cost for the sake of volumes

Russia does not intend to sell oil at any cost for the sake of volumes. This was stated by First Deputy Minister of Energy of the Russian Federation Pavel Sorokin during the Middle East Conference of the Valdai Discussion Club.

“It is important to understand the principles behind this reduction. They were very clearly outlined by the President [РФ Владимир Путин]And [вице-премьер] Alexander Novak, is that there is no task to sell oil at any price, just sell for the sake of volume, ”he said (cit. according to RIA Novosti).

February 10, Deputy Prime Minister of the Russian Federation Alexander Novak (supervises the fuel and energy complex) informedthat Russia will voluntarily cut oil production by 500,000 barrels per day in March, excluding gas condensate, that is, by about 5% of the current level. According to the official, such a move “will contribute to the restoration of market relations” in the face of anti-Russian sanctions.

Earlier, in early February, he said that in January 2023, oil production in Russia remained at the level of 9.8-9.9 million barrels per day. According to the report of the International Energy Agency (IEA) dated February 15, the total export of oil and oil products from Russia in January 2023 increased almost 300,000 barrels per day compared to the level of December 2022 and amounted to 8.2 million barrels per day.

After the start of Russia’s special operation in Ukraine, Western countries began to impose sanctions. In particular, from December 5, 2022, the oil price ceiling introduced by the G7 countries and the EU is in effect. It is set at $60/bbl. On February 5, an embargo on maritime supplies from Russia came into force. At the same time, the price ceiling for petroleum products began to operate. The limit is set separately for more expensive oil products (for example, diesel fuel) – $100/bbl. and for cheaper ones (fuel oil) – $45/bbl. After that, the export of oil and oil products from Russia to the EU in January 2023 decreased three times to 1.3 million barrels per day.

In response to these restrictions, Russian President Vladimir Putin signed a retaliatory decree on December 27, 2022, according to which Russia will not supply oil if the contracts explicitly or implicitly provide for a price cap mechanism. It is emphasized that this measure is applied at all stages of deliveries to the final buyer. The document entered into force on February 1.