RIYADH: Oil futures slipped 1.5 percent in choppy trading on Friday ahead of a meeting of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, on Sunday and an EU ban on Russian crude on Monday.
Brent crude futures settled down $1.31, a 1.5 percent drop, at $85.57 per barrel. US West Texas Intermediate crude CLc1 futures fell $1.24, or 1.5 percent, to $79.98 per barrel.
Both contracts dipped in and out of the negative territory, but notched their first weekly gains at around 2.5 percent and 5 percent, respectively, after three consecutive weeks of drops.
Russia says price cap is dangerous
Russia said on Saturday it would continue to find buyers for its oil, despite what it said was a “dangerous” attempt by Western governments to introduce a price cap on its oil exports.
A coalition of Western countries led by the Group of Seven nations agreed on Friday to cap the price of Russian seaborne oil at $60 a barrel, as they aim to limit Moscow’s revenues and curb its ability to finance its invasion of Ukraine.
Russian President Vladimir Putin and high-ranking Kremlin officials have repeatedly said that they will not supply oil to countries that implement the price cap.
In comments published on Telegram, Russia’s embassy in the US criticized what it said was the “reshaping” of free market principles and reiterated that its oil would continue to be in demand despite the measures.
“Steps like these will inevitably result in increasing uncertainty and imposing higher costs for raw materials’ consumers,” it said.
“Regardless of the current flirtations with the dangerous and illegitimate instrument, we are confident that Russian oil will continue to be in demand.”
Zelensky says level of price cap on Russian oil isn’t serious
The $60 price cap on seaborne Russian oil agreed by G7 nations and Australia is not serious and will do little to deter Russia from waging war in Ukraine, President Volodymyr Zelensky said on Saturday.
The EU is now set to approve the cap after the G7 and Australia struck a deal on Friday. The measure aims to reduce Russia’s income from selling oil, while preventing a spike in global prices.
“You wouldn’t call it a serious decision to set such a limit for Russian prices, which is quite comfortable for the budget of a terrorist state,” Zelensky said in a video address.
“It’s only a matter of time before stronger tools will have to be used anyway. It is a pity that this time will be lost.”
Andriy Yermak, head of Zelensky’s administration, said earlier that the cap should be set at $30 “to destroy the enemy’s economy quicker.”
Zelensky complained the world had shown weakness by setting the cap at $60, which he said would swell Russia’s budget by $100 billion a year.
“This money will ... go toward further destabilization of precisely those countries that are now trying to avoid serious decisions,” he said.
(With input from Reuters)