Russian President, Vladimir Putin has vowed to deepen trade ties with Russia’s, especially China who represent a big oil and natural gas customer since the invasion of Ukraine, and the agitations from G7 countries.
“Let me remind you that by introducing sanctions, Western countries were trying to push Russia to the periphery of world development. But we will never take the route of self-isolation,” Putin said in a televised speech yesterday, monitored by Reuters.
“On the contrary, we are broadening, and will broaden cooperation with all who have an interest in that,” he added.
Putin’s plans includes measures like ramping up natural gas sales to China and other Asian countries, creating a natural gas trading hub in Turkey, and setting the price for natural gas sales to Europe.
His latest remarks is coming shortly after European Union banned seaborne imports of Russian crude and slapped a $60 price cap on oil sold by Russia from December 5.
According to reports, the limitations brought by the price cap on Russian oil have caused the country’s crude exports to nosedive – spelling trouble for the nation’s economy.
Crude oil is a cash cow and Moscow’s biggest money-makers. Currently 90% of Russia’s supplies are being redirected to Asia, yet at even steeper discounts, with oil regularly being sold below the level of the price cap, traders familiar with the matter told Reuters.
Putin has rebuffed the oil price cap as “stupid,” and threatened to retaliate by refusing to sell Russia’s supplies to participating countries.
Economists say cutting itself off from western markets could wither Russia’s economy long-term, with Russia’s central bank warning that the latest rounds of sanctions are already “economic shocks” to the nation.
National GDP is expected to shrink 2.5% this year, Putin said, though the International Monetary Fund estimates a contraction of 3.4%. Still, the Russian president emphasized the country’s resilience.
He estimates that pensions and minimum wage would rise despite heavy military spending as the war in Ukraine approaches the one year mark.
“Despite the objective difficulties of the current year, we will achieve positive results in reducing poverty, and next year we need to reinforce this positive dynamic,” Putin said.