Russia vows to slash oil production, latest response to Western nations' price cap amid Ukraine war

Russia plans to cut oil production by 500,000 barrels a day next month, after Western nations capped the price of Russian oil to condemn the country's invasion of Ukraine.

“As we stated before, we will not sell oil to those who directly or indirectly adhere to the 'price ceiling,' "Deputy Prime Minister Alexander Novak on Friday told Russian news agencies.

Reuters analysts said slashing production is Russia’s strategy to raise oil prices, which could lead to higher gasoline prices.

Novack argued the cutback – about 5% of Russia's oil output – will "help restore market-style relations.”

Brent Crude traded 2.15% higher at $86.42 per barrel. 

In June 2022, the European Union agreed to phase out all sea-borne imports of Russian crude oil, as part of Western sanctions that attempt to limit Russia President Vladimir Putin's ability to fund his war in Ukraine.

Roughly six months later, the G7 countries and the European Union agreed to cap the price at which Western brokers, insurers and shippers can trade Russia’s seaborne oil for markets elsewhere at $60 a barrel, according to CNN.