Oil prices have risen for the second week in a row. This is partly due to Russia’s plans to cut crude oil production by about 500,000 to 700,000 barrels per day in response to the G7 price cap.
A barrel of West Texas Intermediate surged above $79, sending the price up about 7% from a week ago. President Vladimir Putin is expected to sign a bill to cut production next week. According to a spokesman, these would be ‘preventive measures’.
The price cap would limit the price of a barrel of Russian oil to $60 in order to reduce Russian export earnings. “Vigilance and a weaker dollar are helping oil today,” said UBS analyst Giovanni Staunova. ‘Russia’s tough language also helps, but the market wants to see the measures in action first. This is why the response is somewhat toned down.’
Effect
It is slowly but surely starting to look like the price cap is seriously hampering the flow of oil from Russia. In the first full week after the ceiling went into effect on Dec. 5 — coupled with a European ban on Russian imports by sea — Russia’s waterborne exports fell by more than 54%.
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
