Putin warns of ‘serious consequences’ if Russian oil price is capped

Russian President Vladimir Putin on Thursday warned of “serious consequences” if Western powers impose price caps on oil from Russia.

“Such actions are contrary to the principles of market relations and, most likely, will lead to serious consequences for the global energy market,” Putin said during a telephone conversation with Iraqi Prime Minister Mohammed Shaya al-Sudani.

In the conversation, Putin and Sudan touched upon the plans of the West and the work of both within the framework of the meetings of the OPEC + alliance (an alliance of oil-producing countries led by Saudi Arabia and Russia), guaranteeing the stability of the oil market. market.

Russia has repeatedly warned that it will not supply crude oil to countries that have adopted such restrictions, and predicted big problems for the population of these countries in the winter.

In addition, the Kremlin may also take retaliatory measures, such as reducing production from the current 530 million tons this year to 490 million tons in 2023.

On Wednesday, European Union governments failed to reach an agreement on a price ceiling for oil from Russia, which the G7 powers want to impose on Moscow as a sanction for military aggression against Ukraine.

The ceiling cap does not directly affect the EU, which has already decided to ban purchases of Russian oil from December 5 (except from a pipeline supplying Hungary, which is almost entirely dependent on those supplies), but would hurt the cargo. ships carrying oil from Russia, some of which are flagged with Greek, Maltese or Cypriot flags.

At one time, the International Energy Agency (IEA) said that the EU embargo on crude oil and petroleum products from Russia would increase market tension.

Instead, when evaluating a proposal to impose a cap on Russian oil, he believes that “it could ease tensions.”