Price cap on Russian oil may lead to a rise in prices in the market - Kazakh minister

ASTANA. Dec 30 (Interfax) - The price cap on Russian oil may lead to an increase in prices in the market, Kazakh Energy Minister Bolat Akchulakov said at a Friday briefing in Astana.

"Russia and Saudi Arabia are two largest oil producers and suppliers to international markets. If a certain volume of oil is removed from the market, it has to be replaced with the same volume from other sources. We know that other countries are stepping up their production," Akchulakov said when asked about an impact that the prices caps on Russian oil may have on the international markets.

"A sharp decrease [in oil production] or removal of a large volume of oil from the market, which may lead to a shortage of oil, will make the prices to respond accordingly right away. You know how they may react if there is a shortage: as a rule, they start growing," the minister added.

The price cap policy is intended to reduce the revenues the Russian Federation earns from its oil sales. On December 5 the G7 countries introduced a ban on some services, including shipping insurance and trade finance associated with Russia oil transportation by sea. However, the ban does not apply to the supplies of Russian oil priced at $60 per barrel and lower.

Similar restrictions will be introduced for Russian petroleum products from February 5, 2023; the price caps are yet to be announced.