Russia plans to voluntarily reduce oil production by 500,000 bpd in March

Russia plans to voluntarily reduce oil production by 500,000 barrels per day, or around 5 percent of output, in March, Deputy Prime Minister Alexander Novak said on Friday, following the introduction of Western price caps.

The G7 economies, the European Union and Australia agreed to ban the use of Western-supplied maritime insurance, finance and brokering for seaborne Russian oil priced above $60 per barrel from December 5 as part of Western sanctions on Moscow over its actions in Ukraine.

The EU also slapped a ban on purchases of Russian oil products and set price caps from February 5.

“As of today, we are fully selling the entire volume of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the ‘price cap’,” Novak said in a statement.

“In this regard, Russia will voluntarily reduce production by 500,000 barrels per day in March. This will contribute to the restoration of market relations.”