Putin threatens production cuts over oil price cap

President Vladimir Putin warned Friday that Russia could reduce oil production in response to a $60 price cap on its oil exports agreed by Western nations over Moscow's Ukraine offensive.

The price ceiling agreed by the EU, G7 and Australia came into force on Monday and seeks to restrict Russia's revenue while making sure Moscow keeps supplying the global market.

"We will consider a possible reduction in production if necessary," Putin told reporters in Kyrgyzstan's capital Bishkek following a regional summit.

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He said the price cap was a "stupid decision" that is "harmful to global energy markets" but "isn't affecting" Russia.

He added that Moscow will announce retaliatory steps "in the next few days". He did not elaborate.

The market price of a barrel of Russian Urals crude is currently around $65 dollars, just slightly higher than the $60 cap agreed, suggesting the measure may have only a limited impact in the short term.