On October 11, 2022, one of the largest facilities for oil and petroleum products in southern Russia is located in the Sheskharis complex, part of Chernomortransneft JSC, a subsidiary of Transneft PJSC, Novorossiysk, Russia. PHOTO AP MOSCOW NICOSIA -- Russia does not exclude the possibility of moderately reducing its oil production due to the uncertainty caused by the decision of the European Union and the Group of Seven to cap the price of Russian crude, a senior official said Tuesday.
Russian oil is in demand on world markets and will find its buyers. Logistics mechanisms and chains will change soon. Deputy Prime Minister Alexander Novak, who is responsible for Russia's energy affairs, told reporters that we do not see any tragedy here.
Moscow doesn't accept the price limit imposed in an artificial and non-market way, which can lead to a decline in investment, a shortage of oil supplies and finally an increase in prices, Novak warned.
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He said that the environment is more challenging, but he said that they will continue to sell oil using new insurance mechanisms, new ways of cooperation between companies, and new means of transportation.
EU member states agreed on a $60 per barrel cap on the price of Russian seaborne crude last week. Insurance, finance and other services for Russian oil shipments will be banned if the fuel sells for a higher price than the limit.
Finance ministers of G 7 countries agreed in September to impose a price cap on Russian oil.
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Cyprus lost 20 percent of its oil tanker tonnage because of EU sanctions on Russia relating to crude oil, Shipping Deputy Minister Vasilis Demetriades said.
Since the EU announced it intends to impose a ban on seaborne Russian oil on October 6, tankers of 900,000 gross tonnage, or 20 percent of Cyprus's tanker tonnage, have been struck off the country's registry, according to Demetriades, according to state-owned CyBC radio.
Oil tanker ship SCF Samotlor sails under the Yavuz Sultan Selim bridge as it crosses the Bosphorus strait after departing from Russia's Novorossiysk port in Istanbul, Trkiye on March 1, 2022. He said that this represents about 10 percent of the total ship tonnage under the Cypriot registry.
Two EU countries with large shipping registries, Greece and Malta, are thought to have suffered even bigger losses.
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He said that the European Commission should take compensatory measures to offset the losses to all shipping countries caused by the punitive measures imposed on Russia in response to its military operations against Ukraine.
Cyprus is preparing to submit specific proposals for compensation of countries that have suffered shipping losses by the end of January, according to Demetriades.
He said that they are doing their utmost to make sure the sanctions are effective, but also to protect the shipping sector.
Cyprus's shipping registry ranks third in the EU and eleventh in the world.
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The country is the largest EU third-party ship management center and is among the top three in the world, with its maritime industry contributing close to 7 percent of its annual economy, estimated at around 26 billion euros $27.3 billion in 2022.