US Assistant Secretary of the Treasury: Russia’s reduction in crude production indicates its inability to sell oil

Ben Harris, US Assistant Secretary of the Treasury, said Thursday, February 16, that Russia’s decision to reduce crude oil production by 500,000 barrels per day reflects its inability to sell all of its oil, as Russian Deputy Prime Minister Alexander Novak announced last week that Moscow will voluntarily reduce production starting from the month. next.

This came after the imposition of a ceiling on Russian crude and oil products prices began on the fifth of February. Moscow’s decision to cut production by about 5% led to a temporary rise in world prices.

“They cut production because they couldn’t sell it, not because they wanted to use oil and refined products as a weapon,” Harris said in remarks at the Argus Americas Crude Summit.

The cut came in the wake of Western embargoes and sanctions, including an unprecedented cap on the price of a barrel of Russian crude oil at $60, to punish Moscow for the war in Ukraine.

According to Finance Ministry data, monthly revenues from oil and gas in Russia’s budget fell by 46% in January to the lowest level since August 2020 in light of the impact of Western sanctions on its most lucrative exports.

Harris said the cap sought to stabilize the market and reduce Russian revenue, both of which were met.

Russia continues to sell discounted barrels of crude to buyers such as China and India.