Western countries are nervous in anticipation of Russia’s response to the oil embargo

French financial newspaper Les Echos said that global markets are nervous in anticipation of Russia’s response to the new European sanctions. The EU embargo on purchase of Russian oil was imposed in early December, as well as a price cap for these purchases.

However, global concerns about oil supply cuts continue to rise. Oil demand in China begins to gradually gain momentum as the anti-Covid policy gets eased. In addition, the U.S. data on the reduction of the country’s oil reserves and authorities’ intention to start purchasing to replenish the stocks were released. All these factors encourage the rise in oil prices.

After the European embargo on Russian oil, Russia announced its willingness to cut its production by 5–7%, or by 500–700 thousand barrels per day.

In response to the established “price cap” for Russian oil, Deputy Prime Minister Alexander Novak stated a possible ban on supplies to countries intending to comply with this restriction.

The official statement also indicated that Russia needs some time to prepare and implement its response to these sanctions.