OPEC+ to Monitor Market Amid G7 Plans to Put Price Cap on Russian Oil, Novak Says

MOSCOW (Sputnik) - The OPEC+ alliance will continue to monitor the oil market situation amid plans of the G7 group to put a price cap on Russian oil, Russian Deputy Prime Minister Alexander Novak said on Monday.

"Next, we will look at how the situation on the market will develop. Because there are a lot of uncertainties, including uncertainties associated with production in countries that are not part of the agreement, statements by individual G7 leaders and issues under consideration regarding on placing a limit on price for the purchase of Russian oil," Novak told the Rossiya 24 broadcaster.

Earlier in the day, OPEC+ announced its decision to return to the oil production level of August and reduce the output by 100,000 bpd in October.

"[OPEC+ decodes to] Revert to the production level of August 2022 for OPEC and non-OPEC Participating Countries for the month of October 2022 as per the attached table, noting that the upward adjustment of 0.1 mb/d to the production level was intended only for the month of September 2022," the alliance said in a statement.

Novak said the decision is related to the market situation:

"This decision was made due to the fact that we considered the current situation on the market, made an assessment, heard the report of the OPEC + technical committee," Novak told the Rossiya 24 broadcaster.

He added that, "So far, the demand is recovering relative to the pre-pandemic level. We expect that next year, early next year, we will reach the corresponding indicators, above 100 million barrels per day of oil demand."

The next meeting is scheduled for October 5.

On September 2, the G7 finance ministers confirmed the plan to introduce a price cap on Russian oil and called on all countries to join the initiative. Earlier in the day, European Commissioner for Economy Paolo Gentiloni said that the European Commission's goal is to introduce a price limit in accordance with the deadlines agreed under the EU's sixth sanctions package, that is, 5 December 2022 for crude oil and 5 February 2023 for petroleum products.

On September 1, Novak condemned the idea of imposing a price cap on Russian oil as absurd, warning that Moscow would not deliver oil and oil products to countries that support the decision. According to Dmitry Birichevsky, the head of the Russian Foreign Ministry's economic cooperation department, possible introduction of any price cap on Russian oil by unfriendly countries will only exacerbate energy crisis, with Moscow acting under economic expediency.