In a jump of 2.6% yesterday led its prices oilBrent and West Texas crude oil, its announcement Russia that it is cutting oil production by 500,000 barrels a day starting next month in response to Western sanctions. This is the realization of a threat that the Kremlin has repeatedly unleashed since G7 and EU countries began to consider the idea of ​​setting a price ceiling for Russian oil.

“Russia believes that the ceiling setting mechanism Russian oil and oil products is interference in market relations and a continuation of the destructive energy policy that the West is deliberately pursuing,” Deputy Prime Minister Alexander Novak commented on the Kremlin’s decision. He even added that with this reduction, “relationships in the world market will be restored.” The volume of 500,000 barrels per day corresponds to 5% of Russian oil production since January figures.

The move is now causing new turmoil in the global market, which has so far been swallowed up by both the restriction and the ban on offshore imports of Russian oil. This is because China’s economic restart is expected to boost global demand for black gold, and a month after the International Energy Agency said global demand would rise by 1.9 million barrels per day in the near future, hitting a record level. 101.7 million barrels per day. Thus, yesterday Brent rose to $86 per barrel, while West Texas crude oil rose to almost $80 per barrel.

This was preceded by the decision taken in October by OPEC + to cut production by 2 million barrels per day. However, according to Reuters sources, the Kremlin made this decision without prior consultations with the international oil cartel, whose leading power is de facto Saudi Arabia. And, as Giovanni Staunovo, an analyst at UBS Group, points out, in the short term, no one can fill the gap left by the fall in oil production in Russia. It should be noted that many analysts are already predicting that oil prices will return to levels of at least $100 per barrel due to increased demand. So far, of course, countries such as Norway, which is poised to almost replace Russia as a supplier of oil and gas to Europe, have increased production.

Many analysts are already predicting that oil prices will return to at least $100 per barrel due to increased demand.

As for Urals crude, Russia’s main oil exports traded at $28 a barrel yesterday as Moscow was forced to turn to Asian markets and mainly to China and India, where it exports its hydrocarbons at deep discounts.

Oil prices jumped to $139 a barrel just after Russia’s invasion of Ukraine almost a year ago. But then they fell to around $80 a barrel, due in part to Western measures such as the $60 per barrel ceiling. However, as everyone shows, the price ceiling for Russian oil did not have the effectiveness that the Western countries were counting on when they adopted it jointly.