"We've been in constant contact with the companies, the
contract making for February has been completed, and on the whole, the
companies are not saying they have problems as of today," Novak told the
meeting led by President Vladimir Putin.
Russian oil production has so far shown resilience in the
face of the sanctions, imposed after Moscow sent troops into Ukraine on
February 24, 2022 and of the price caps, introduced by Western countries in
December 2022.
Putin in December 2022 signed a decree that banned the
supply of crude oil and oil products from February 01, 2023 for five months to
nations that abide by the cap.
Novak said the main problem for Russian oil was a high
discount to international benchmarks as well as rising freight costs.
Russian oil traditionally sells at a discount to
international benchmarks such as Brent. The discount, has widened since the
imposition of sanctions and now stands at up to US$30/barrel to Brent.
"But I hope that the situation will be temporary and it
(discount) should decrease over time, as we saw in 2022," Novak said.
Putin, who has long advocated the idea of reversing the
price differentials in favour of Russian oil, told Novak that the state budget
should not suffer as a result of the discount.
Putin struck an upbeat tone about the wider Russian economy.
"We can state with assurance that the financial and
banking system of the country, the economy as a whole, is in a stable state,
and is actively developing," Putin said. "We have every reason to
believe these tempos will be maintained in 2023."
Russian Economy Minister Maxim Reshetnikov told the meeting
that domestic inflation was 11.9% in 2022. He said inflation was likely to be
substantially lower by the end of the first quarter, with the second quarter
figure below the targeted 4%.
