New Delhi

The Kremlin may decide to cut oil production by around seven per cent in the first quarter of 2023 in the aftermath of the oil price cap imposed by the European Union members, a Russian deputy prime minister said on Friday according to AFP. He also said that Russia will stop oil supply to all countries who agreed with the price cap as it was seen as a support for Ukraine in the ongoing conflict.

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"At the start of next year, we could make a reduction of 500,000-700,000 barrels per day. For us, that's around 5-7 percent," Alexander Novak, who is in charge of Moscow's energy policy, said.

The European Union imposed a $60 per barrel price ceiling on oil exports in order to decrease the revenue earned by Russia and it was also somewhat agreed by G7 countries and Australia. The Russian economy took a hit due to the restrictions and a decrease in production will help the cause.

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Although the Russian oil supply to third-world countries have gone up considerably in the wake of the sanctions but the EU embargo on seaborne deliveries also covers such deals. As a result, the dip in production can also be a move to control the damage that the restrictions have potentially done.

The Kremlin, however, has made it completely clear that the decisions taken regarding the oil production will have no impact on the ongoing crisis in Ukraine. Russian President Vladimir Putin continued to back the military campaign and even talked about using nuclear force – but just as a deterrent.