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Russia May Cut Oil Output in Response to Price Caps, Says Deputy PM

Liberia-flagged Aframax tanker Suvorovsky Prospect discharges fuel oil from Russia at the Matanzas terminal, in Matanzas, Cuba, July 16, 2022. (Reuters)
Liberia-flagged Aframax tanker Suvorovsky Prospect discharges fuel oil from Russia at the Matanzas terminal, in Matanzas, Cuba, July 16, 2022. (Reuters)
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Russia May Cut Oil Output in Response to Price Caps, Says Deputy PM

Liberia-flagged Aframax tanker Suvorovsky Prospect discharges fuel oil from Russia at the Matanzas terminal, in Matanzas, Cuba, July 16, 2022. (Reuters)
Liberia-flagged Aframax tanker Suvorovsky Prospect discharges fuel oil from Russia at the Matanzas terminal, in Matanzas, Cuba, July 16, 2022. (Reuters)

Russia may cut oil output by 5%-7% in early 2023 as it responds to price caps on its crude and oil products by halting sales to the countries that support them, Deputy Prime Minister Alexander Novak told state television on Friday.

Detailing for the first time the Russian response to the price caps introduced by the West over Moscow's invasion of Ukraine, Novak said the cuts could amount to 500,000-700,000 barrels per day.

The European Union, G7 nations and Australia introduced a $60 per barrel price cap on Russian oil from Dec. 5, on top of the EU's embargo on imports of Russian crude by sea and similar pledges by the United States, Canada, Japan and Britain.

Russian President Vladimir Putin said on Thursday he would issue a decree early next week detailing Moscow's actions in response to the price cap.

Novak said the decree would ban sales of oil and oil products to countries that join the price cap and companies that demand its observance.

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UK Inflation Rises Less Than Expected in July

Children play underneath a sprinkler at Parliament Square in London, Britain, August 13, 2024. REUTERS/Hollie Adams
Children play underneath a sprinkler at Parliament Square in London, Britain, August 13, 2024. REUTERS/Hollie Adams
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UK Inflation Rises Less Than Expected in July

Children play underneath a sprinkler at Parliament Square in London, Britain, August 13, 2024. REUTERS/Hollie Adams
Children play underneath a sprinkler at Parliament Square in London, Britain, August 13, 2024. REUTERS/Hollie Adams

British consumer price inflation rose to 2.2% after two months at the Bank of England's 2% target, a slightly smaller increase than economists expected, and services inflation, closely watched by the BoE, slowed sharply, official data showed.
Economists polled by Reuters had forecast the annual headline CPI rate would rise to 2.3%.
Sterling fell sharply against the US dollar after the data was published on Wednesday.
When the BoE cut interest rates from a 16-year high of 5.25% at the start of this month, it said May and June's 2% inflation readings probably marked a low point for inflation.
The central bank expected CPI to rise to 2.4% in July and reach around 2.75% by the end of the year as the effect of sharp falls in energy prices in 2023 faded, before returning to 2% in the first half of 2026.
British inflation peaked at a 41-year high of 11.1% in October 2022 driven by a surge in energy and food prices after Russia's full-scale invasion of Ukraine as well as COVID-19 labor shortages and supply chain disruption.
The BoE remains relatively focused on longer-term inflation pressures, including services prices and wages as well as general labor market slack.
Wednesday's data showed that annual services price inflation fell to 5.2% in July from June's 5.7%, lower than the Reuters poll forecast of 5.5% and the lowest since June 2022. BoE staff had predicted a drop to 5.6%.
Official data on Tuesday showed that annual wage growth excluding bonuses slowed to its lowest in nearly two years at 5.4%, in line with economists' forecasts but still nearly double the rate the BoE sees as consistent with CPI staying at 2%.