West Texas Intermediate (WTI) crude futures continued to trend lower on Wednesday, currently trading at around $83 a barrel as Russian President Vladimir Putin threatened to slash energy supplies if Western countries imposed price caps on Russia’s oil and gas exports.
He termed the move to impose price caps on Russian gas as “stupid.” Putin was speaking at an economic forum in Vladivostok on Wednesday. Moreover, the Russian President said that Russia will walk away from its supply contracts with the West if such a move took place.
Putin commented, “Will there be any political decisions that contradict the contracts? Yes, we just won’t fulfil them. We will not supply anything at all if it contradicts our interests.”
Russia is the second largest oil exporter in the world and a top exporter of natural gas and cutting off Russian supplies would put global energy markets in turmoil.
Europe could bear the brunt of a drop in the Russian energy supply as it imports around 40% of its natural gas and 30% of oil from Russia. Other concerns that have dragged oil prices lower include a weakening demand for oil and bleak economic data for China. This drop in oil prices comes even as OPEC decided to cut oil production.
