Putin's Point Man On Energy Says Russia Won't Adhere To Western Oil Price Cap Even If It Has To Cut Production

President Vladimir Putin's point man on energy and Russian Deputy Prime Minister Alexander Novak said even if Russia has to trim production, it will not sell oil subject to a Western price cap, Reuters reported on Sunday.

The Group of Seven (G7) nations have agreed to put a price cap of $60-per-barrel on Russian crude oil and the European Union has decided on the same price. As per the new consensus, the cap will ban companies from shipping, insuring, or financing Russian oil unless the oil is sold below $60 a barrel.

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Novak said the West's move was a gross interference that contradicted the rules of free trade and would destabilize global energy markets by triggering a shortage of supply, according to the report.

"We are working on mechanisms to prohibit the use of a price cap instrument, regardless of what level is set, because such interference could further destabilize the market," said Novak, Russia’s official in charge of the country's oil, gas, atomic energy and coal.

"We will sell oil and petroleum products only to those countries that will work with us under market conditions, even if we have to reduce production a little," Novak added.

Price Action: Meanwhile, OPEC+ has decided to maintain oil production targets at current levels, including an existing policy of reducing oil production by 2 million barrels per day.

The United States Brent Oil Fund BNO closed 1.27% higher on Tuesday while the Vanguard Energy Index Fund ETF VDE closed 1.34% higher.

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