Putin threatens to halt energy supplies over price cap

Vladimir Putin has warned that Russia could cut off energy supplies if price caps are imposed on oil and gas exports.

Finance ministers from the G7 group of economies, which includes the UK, Germany, France and Japan, announced plans to impose a price cap on Russian energy exports last week, in an attempt to stop Moscow benefiting from the surge in wholesale prices seen since the invasion of Ukraine.

But speaking at an economic forum in Vladivostok on Wednesday, Putin called the plans "stupid" and said Russia was prepared to walk away from supply contracts should caps be imposed.

According to Reuters, the Russian president said: "Will there be any political decisions that contradict the contracts? Yes, we won’t fulfil them. We will not supply anything at all if it contradicts our interests. We will not supply gas, oil, coal, heating oil - we will not supply anything.

"We would only have one thing left to do: as in the famous Russian fairy tale, we would sentence the wolf’s tail to be frozen."

Since invading Ukraine, the European Union and other Western allies have imposed numerous sanctions on Russia. In response, Russia has cut off gas supplies to some European countries, and reduced flows in other pipelines.

Last week it switched off the key Nord Stream 1 pipeline, which carries gas to Europe through Germany, further raising concerns about potential shortages during the colder winter months. Gazprom, the state energy company, said that it needed to carry out repairs, but many in the West saw the shutdown as a political move.

Putin blamed the sanctions for the pipeline being offline, however, and called on Germany to return a turbine for a compressor station that would allow it resume pumping gas. "Give us a turbine and we will turn on Nord Stream 1 tomorrow," he told the conference, according to Reuters. "But they don’t give us anything."

EU energy ministers are due to meet on Friday to discuss how to reduce gas supplies from Russia, as wholesale prices remain high ahead of winter.

As well as the EU being heavily reliant on Russia for its energy requirements, oil and gas exports are also a major revenue stream for the Kremlin. But Putin told the conference that the country was finding it easy to sell energy abroad still, according to the Financial Times. Despite much of Russia’s energy infrastructure being aimed at Europe, he insisted Moscow would have no issues redirecting gas sales to countries such as China.

Oil prices rose in response to Putin’s remarks, with Brent crude and West Texas Intermediate both 1% higher at $93.66 and $87.84 respectively.