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Russian Deputy Prime Minister Alexander Novak attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, on June 4, 2021.Evgenia Novozhenina/Reuters

Russian Deputy Prime Minister Alexander Novak said on Thursday that attempts to limit the price of Russian oil could lead to “disbalance” in the market and push prices higher.

His comments come after G7 leaders agreed on Tuesday to explore “the feasibility of introducing temporary import price caps” on Russian fossil fuel, including oil, and tasked ministers to evaluate the proposal urgently.

“This is another attempt to intervene into the market mechanisms which may only lead to market’s disbalance, deficit... which would lead to price increase,” Novak said.

European Union officials told Reuters on Thursday that Germany and other EU governments are cautious about the idea.

Russia needs an oil price of $100 per barrel to balance it budget, analysts say. Oil is currently trading at around $111 a barrel.

Novak said that quite a big amount of Russian oil and oil products has re-routed to Asian markets, allowing Moscow to restore its oil production in June to 9.9 million barrels per day (bpd) from 9 million bpd seen in March and April.

“We are confident that during the summertime we will restore (oil output to the pre-sanction levels) and Russian role in the (OPEC+) deal will be as it was in the past,” he said.

OPEC+ said on Thursday it would stick to its planned oil output hikes in August but avoided discussing policy from September onwards as prices have risen on tight supplies and worries that the group has little ability to pump more.

The group includes Saudi Arabia, Russia and other major oil producers.

At its June 2 meeting, OPEC+ decided to increase output each month by 648,000 barrels per day in July and August, up from a previous plan to add 432,000 bpd per month.

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