G7's Russia Oil Price Cap Will Cause Turmoil in Global Market, Ex-Texas Oil Regulator Says

WASHINGTON (Sputnik) - The G7's decision to introduce a price cap on Russian oil may destabilize the global market again, Ryan Sitton, a former commissioner in the Texas Railroad Commission, the oil regulator in the United States' top oil-producing state, told Sputnik.

Earlier on Friday, the G7 finance ministers agreed to introduce a price cap for Russian oil.

"What you end up doing is you sort of price fix the entire market is what happens," Sitton said. "The problem with that is that will destabilize [global market] again."

Sitton said that a price cap on Russian oil may drop the price of a barrel of crude oil below $80 for a short period, but in another year it may climb to $130 a barrel because the world won't be producing enough oil.

Moreover, Sitton explained that oil producers may be dissuaded from investing in more oil production because countries will be more willing to buy discounted oil from Russia.

G7 comprises the United States, the United Kingdom, Canada, Italy, Germany, Japan, and France.

Russian Deputy Prime Minister Alexander Novak earlier slammed a price cap on Russian oil as absurd, warning that Moscow would not deliver oil and oil products to countries that support the decision.