Oil prices jumped more than 2% on Friday, heading for weekly gains, as Moscow announced plans to reduce crude production next month in response to Western price caps.
Brent crude futures were trading 2% higher to $86.21 a barrel while US West Texas Intermediate (WTI) futures were up 2% at $79.63. Both contracts are on course for weekly gains of around 10%.
Russia will voluntarily reduce oil production in March by 500,000 barrels per day as it halts sales to buyers complying with a Western-imposed price cap, Russian Deputy Prime Minister Aleksandr Novak announced on Friday.
Novak said the move should help restore market relations shattered by the price ceiling, which he branded “illegal.”
“Russia believes that the mechanism of price caps on Russian oil and petroleum products is an intervention in market relations and an extension of destructive energy policies of the collective West,” the deputy PM said in a statement.
The EU and the G7 nations introduced a price cap on Russian supplies on February 5, setting a limit of $100 per barrel for diesel, jet fuel and gasoline coming from Russia, and a $45 per barrel for other oil products that trade below the crude price, such as fuel oil used in industry. Fuel exports priced over these limits will be barred from insurance and shipping services from companies located in Western countries. The caps follow a previously introduced $60-per-barrel price ceiling on Russian crude oil.
Russia has repeatedly warned of potential output cuts since the EU and G7 began discussing capping the price of Russian exports. Economists say the production reduction, which is the equivalent of about 5% of January’s output, may trigger volatility on the oil market, which has taken in its stride the EU ban on seaborne imports of Russian oil.
Russia is currently able to sell “all volumes of oil produced” to foreign markets, Novak said, adding that “we will act based on how the market situation is developing,” when making further decisions.
There are concerns that Moscow’s decision will deepen the 2 million barrel-a-day supply curbs announced late last year by OPEC+, which Russia leads along with Saudi Arabia.
An analyst at UBS Group, Giovanni Staunovo, told Bloomberg that in the short term there is nobody to fill the supply gap created by the Russian cuts.
Crude prices jumped on the news, with the international benchmark Brent rising more than 2% to $86.60 a barrel as 13:00 GMT on Friday.
by Russia Today
Fabio is Director and Editor of Gospa News; a Christian Information Journal.
Fabio Giuseppe Carlo Carisio, born on 24/2/1967 in Borgosesia, started working as a reporter when he was only 19 years old in the alpine area of Valsesia, Piedmont, his birth region in Italy. After studying literature and history at the Catholic University of the Sacred Heart in Milan, he became director of the local newspaper Notizia Oggi Vercelli and specialized in judicial reporting.
For about 15 years he is a correspondent from Northern Italy for the Italian newspapers Libero and Il Giornale, also writing important revelations on the Ustica massacre, a report on Freemasonry and organized crime.
With independent investigations, he collaborates with Carabinieri and Guardia di Finanza in important investigations that conclude with the arrest of Camorra entrepreneurs or corrupt politicians.
In July 2018 he found the counter-information web media Gospa News focused on geopolitics, terrorism, Middle East, and military intelligence.
His articles were published on many international media and website as SouthFront, Reseau International, Sputnik Italia, United Nation Association Westminster, Global Research, Kolozeg and more…
His investigations was quoted also by The Gateway Pundit, Tasnim and others
He worked for many years for the magazine Art & Wine as an art critic and curator.