Russia says it will cut oil production over Western caps

Russia has announced it will cut oil production by 500,000 barrels per day next month after Western countries capped the price of its crude over its action in Ukraine

Russia announced on Friday that will cut oil production by 500,000 barrels per day next month after Western countries capped the price of its crude over its action in Ukraine.

“As of today, we fully sell all our crude output, but as we stated before, we will not sell oil to those who directly or indirectly adhere to the ‘price ceiling,’” Deputy Prime Minister Alexander Novak said in remarks carried by Russian news agencies.

“In connection with that, Russia will voluntarily cut production by 500,000 barrels a day. It will help restore market-style relations,” he said.

Analysts have said one possible Russian response to the cap would be to slash production to try to raise oil prices, which could eventually flow through to higher gasoline prices at the pump as less oil makes it to the global market.

International benchmark Brent crude rose 2.2% on Friday, to $86.42 per barrel.

The Group of Seven major democracies have imposed a $60-per-barrel price cap on Russian oil shipped to non-Western countries. The goal is to keep oil flowing to the world to prevent price spikes that were seen last year, while limiting Russia's financial gains that can be used to pay for its campaign against Ukraine.