MOSCOW, July 5 — Russia’s former president Dmitry Medvedev said today a reported proposal from Japan to cap the price of Russian oil at around half its current level would lead to significantly less oil on the market and could push prices above US$300-US$400 (RM1,325-RM1,767) a barrel.

Commenting on the proposal, which was reportedly put forward by Prime Minister Fumio Kishida, Medvedev said Japan "would have neither oil nor gas from Russia, as well as no participation in the Sakhalin-2 LNG project” as a result.

President Vladimir Putin last week signed a decree that seizes full control of the Sakhalin-2 gas and oil project in Russia’s far east, a move that could force out Shell as well as Japanese companies Mitsui & Co and Mitsubishi Corp.

In order to stay in the new firm which is set to replace the existing operating company, Sakhalin Energy Investment Company, foreign shareholders need to ask the Russian government for a stake within one month.

G7 leaders agreed last week to explore the feasibility of introducing temporary import price caps on Russian fossil fuels, including oil, in an attempt to limit Russian resources to finance its military campaign in Ukraine.

"There will be significantly less oil on the market, and its price will be much higher. Moreover, higher than the predicted astronomical price of US$300-400 per barrel,” Medvedev, now deputy chairman of Russia’s Security Council, wrote on social media.

In comments about the proposals to introduce a cap at around half the current price for the Russian oil, a Kremlin spokesman said yesterday that other countries may disagree with that. — Reuters