Russia cuts oil output by 500,000 barrels per day

STORY: Russia will cut oil production by 500,000 barrels per day in March.

That's according to Deputy Prime Minister Alexander Novak on Friday (February 10).

The cut adds up to around 5% of output, and comes after the West imposed price caps on Russian oil

It suggests the West's sanctions over the war in Ukraine have had some impact.

In December, the G7, European Union and Australia agreed a fresh move against Moscow.

That banned the use of Western-supplied maritime insurance, finance and brokering for seaborne Russian oil priced above $60 per barrel.

The EU also banned purchases of Russian oil products and set price caps from February 5.

Now the upcoming production cut marks the biggest fall in Russian oil output since April last year.

It collapsed almost 9% after Western sanctions first took hold.

Russia has managed to set up logistic chains for its oil sales since then, mostly in Asia.

Oil is a key source of revenue for Moscow's state budget, which posted a $25 billion deficit in January.

The price of international benchmark Brent crude rose on Friday's update.

It was up 2% by lunchtime in Europe.