Russia Cuts Oil Production by 500,000 Barrels Amid Price Caps, Global Fuel Prices Rise

On Friday, Russia announced that it would cut its oil production by 500,000 barrels a day in March, as a response to Western energy sanctions and price caps.[0] This cut is equivalent to around 5 percent of Russian oil output and could have a major impact on global fuel prices.[1]

The price caps, which were set by the Group of Seven (G-7) nations, including the United States, are aimed at limiting the funds that the sale of Russian oil will bring to Moscow. In December, the G-7 set a $60/bbl cap on crude oil originating in Russia. This was followed by two new price caps on seaborne petroleum products that originate in Russia in February. The European Union, the United States, and Australia also implemented price cap policies regulating the maritime transportation of Russian Oil and Russian Petroleum.[2]

The sanctions have had a major impact on Russia’s oil exports, resulting in a fall in oil export profits. Despite this, Russia’s oil production has been surprisingly resilient, with the country’s output rebounding to produce around 10.9 million barrels per day at the end of 2022.[3]

The news of the production cut has caused global fuel prices to increase, with U.S. crude futures rising to above $80 per barrel, while Brent crude futures also advanced more than 2% to around $87 per barrel.[4]

The sharp reduction in Russian oil production is likely to cause global fuel prices to rise further over the next few months. This is likely to create difficulties for Kenyans hoping for lower prices at the pump in the near term.[5]

0. “Oil jumps as Russia retaliates on caps; G7 warns about Moscow stunt By”, 10 Feb. 2023,

1. “Why Oil and Natural Gas Stocks Surged Today” The Motley Fool, 10 Feb. 2023,

2. “G7 Nations Set Two Additional Price Caps Related to the Maritime Transport of Petroleum Products of Russian Origin” JD Supra, 13 Feb. 2023,

3. “Putin enjoys oil boom as Russia sanctions fail to dent Kremlin coffers” Express, 14 Feb. 2023,

4. “Russia seeks to once again weaponize oil – White House” Ukrinform, 11 Feb. 2023,

5. “Fuel prices to go up as Russia oil supply cut causes global shortage” The Standard, 12 Feb. 2023,