Price Cap on Russian Oil to Disrupt Market Stability, Venezuelan Foreign Minister Says

UNITED NATIONS (Sputnik) - The plan of G7 countries to impose a price cap on Russian oil exports will backfire on these nations, while also causing a serious imbalance in the oil market, Venezuelan Foreign Minister Carlos Faria told Sputnik.

"I believe, and I base this on the opinion of specialists, that this idea of placing a ceiling on the price of Russian oil specifically will create an enormous distortion in the oil market. This will cause prices to go out of control," Faria said on the sidelines of the United Nations General Assembly.

The OPEC+ alliance, which, among other nations, includes Russia and Venezuela, ensures that oil prices are in check, so that other producers and importers are not harmed, the foreign minister noted.

"I consider this idea [price caps on Russian oil] to be negative if it is applied by those who apply it, as has happened with the thousands of coercive measures set against Russia. They are going to see how this [step] will return as a boomerang against them," Faria noted.

Russian Foreign Minister Sergei Lavrov and his Venezuelan counterpart Carlos Faria meet in Moscow on Monday, July 4, 2022.

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After holding a meeting with Russian Foreign Minister Sergei Lavrov on the sidelines of the United Nations General Assembly in New York, Faria also noted that trade between Venezuela and Russia has been complicated by Western sanctions, but has not been rendered impossible, with both Moscow and Caracas exploring ways to continue cooperation.

"We also evaluated the situation that has been occurring with regard to trade, in relation to the sanctions to which both Russia and Venezuela have been subjected, which has been somewhat complex in terms of trade exchange, but not impossible. We are already finding ways for this to continue working," Faria said.

He stressed that Russia and Venezuela are strategic partners linked by friendly relations and this remains unchanged with the start of the military op in Ukraine.

"The relations between Venezuela and Russia are strategic. We are brotherly countries. President [Nicolas] Maduro and President Putin have a very friendly relationship and a level of rapprochement to carry out all the projects they have decided to develop," Faria said, adding that "there is no reason why this should change after the beginning of the special military operation."

The US, Britain, and the EU slapped several rounds of sanctions on Russia after Moscow launched the special military operation in Ukraine on February 24. The restrictions resulted in a major energy crisis and record-high inflation in the EU, Britain, and many other countries.

Moscow noted that plans to introduce price caps on Russian fuel are absurd, warning that if the move is implemented, it will prompt Russia to discard its energy contracts.