After two weeks of silence in detailing how it would react to the G7 oil price cap, overnight the Kremlin raised the stakes for the west when state-run Tass news service quoted Deputy Prime Minister Alexander Novak as saying that Russia may reduce output by 500,000 to 700,000 barrels a day in response to the cap. While not yet formalized, President Putin plans to sign a decree on the nation’s reaction to the threshold on Monday or Tuesday, containing unspecified “preventive measures.” As the war in Ukraine grinds on, traders have been waiting for Moscow’s full response to the cap, a policy that imposed a $60-a-barrel ceiling on Russian crude in a bid to reduce the Kremlin’s income while keeping exports on the market. While the policy has largely worked so far, with Russia’s popular Urals oil trading below $60 due to sharp discounts to Brent, as the price of oil rises, Urals will also rise above the critical threshold potentially depriving the world of million in barrels of daily supply.
Russia wi ll Raise Crude Oil Exports to non cap countries
NN: The oil market is vastly oversupplies