US Assistant Secretary of the Treasury Ben Harris said on Thursday that Russia’s decision to cut oil production by 500,000 barrels per day reflects Russia’s inability to find channels to sell its crude oil exports.
Commenting on the western cap imposed on Russian oil prices, the US official stated that the price cap sought to maintain the stability of the oil market while reducing Russia’s revenues, which has already been achieved. As a guest, no American companies have participated in trading Russian oil above the maximum price.
It should be noted that Russian Deputy Prime Minister Alexander Novak announced last week that his country’s oil production will decrease as of next March, adding that Russia is seeking to restore relations with the markets.
The Russian official also stressed that his country refuses to abide by any oil price ceiling that was previously imposed by the European Union countries along with the G7 countries, adding that it will not sell its crude oil to those who adhere to the price ceiling, directly or indirectly.
Strong losses for crude oil prices at the end of the week, why?
It is worth noting that the American investment bank, Goldman Sachs, earlier stated that Russia’s trading partners are buying Russian oil in increasing amounts, more than indicated by the announced prices, and Goldman Sachs estimated that this gap had risen to about $ 25 a barrel in December.
And Goldman Sachs economists indicated that the resilience of oil production in Russia so far may partly reflect that the actual price paid for Russian oil appears to be much greater than the listed price assessments, and accordingly we expect Goldman Sachs that Russia will reduce oil production by 570 thousand barrels per day in the period from March to june.