Novak: Sanctions on Russian oil have strengthened competition for it, fueling inflation globally

ST. PETERSBURG. June 16 (Interfax) - Western sanctions on Russian oil and petroleum products have strengthened competition for them in global markets and fueled inflation worldwide, Deputy Russian Prime Minister Alexander Novak said at the St. Petersburg International Economic Forum.

"Competition for the existing energy resources is intensifying. It is no longer there, there's no spare capacity in the world. Everyone knows about it. Yes, there is spare capacity that Saudi Arabia has together with Kuwait and the United Arab Emirates. It also includes Russian spare capacity, but this is 3.5-4 [million barrels per day] in total," he said.

"Inflation in the U.S. is already 8.6%, it's never been as high. Then there as the 0.75 pp rate hike by the Federal Reserve. That will result in the sharpest slowdown in investment activity. Inflation is already above 6% in Europe. Prices are rising not just for oil and gas but throughout the whole chain - for housing and utilities, electricity," Novak said.

He said the decisions taken by Western countries were "purely political in nature" and were being used "for the sake of political ambitions."

Novak said Russia played a balancing role in world gas supply and, with Saudi Arabia, oil supply. He said world demand for oil could grow another 4-5 million barrels per day.