Novak warns of Russia's readiness to cut oil output under Western-imposed price cap

Russia’s Deputy Prime Minister Alexander Novak

Russian Deputy Prime Minister Alexander Novak warned that the country’s authorities may be prepared to accept a certain oil output cut — despite the drop in government revenues — in response to the price cap that the G7 group of leading economies and Australia officially agreed on late last week.

The new restriction, Novak told Russian state-run TV channel Vesti24, is a “non-market and coarse mechanism” that contradicts to all free trade rules, including those of the World Trade Organization (WTO).

“We are working on prohibitions [for Russian oil producers] to use the price cap mechanism, not dependent upon its level,” he was quoted as saying.

Meanwhile, Kremlin is preparing a decree to legally ban Russian oil producers and traders from interacting with countries and companies guided by the price cap, an unnamed government official in Moscow told Reuters.

Earlier, the G7 and Australia agreed a price cap of $60 per barrel for Russian seaborne oil cargoes transported to countries outside Europe not participating in the European Union’s full embargo on Russian oil purchases.