Russia's Novak sees oil price volatility easing despite Middle East turmoil

© Reuters. FILE PHOTO: Russia's Deputy Prime Minister Alexander Novak attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 6, 2024. Sergey Kulakov/Roscongress Foundation via REUTERS/File photo

MOSCOW (Reuters) - Russian Deputy Prime Minister Alexander Novak expects oil prices' fluctuations will subside following volatility spurred by the tensions in the Middle East as geopolitical risks are already factored in, he told Al Arabiya News.

Novak, who also oversees the broader Russian economy, said the sanctions-hit economy will sustain any pressure and Western-imposed price caps on the country's oil.

"We can live through any price," Novak told Al Arabiya News in an interview published on Monday.

Oil prices extended gains on Monday, buoyed by escalating concerns over potential supply pressures from Middle East producers following Israel's increased attacks on Iranian-backed forces in the region. [O/R]

"The events occurring here and now in the Middle East are affecting the market, definitely," Novak was quoted as saying in response to a question about the killing of Hezbollah leader Sayyed Hassan Nasrallah.

"In recent weeks the prices have been volatile," Novak told the news outlet. "I think things are going to get back to normal," he added.

Last week, Brent oil futures fell by about 3%, while U.S. West Texas Intermediate futures declined by around 5% as demand worries increased after fiscal stimulus from China, the world's second-biggest economy and top oil importer, failed to reassure market confidence.

Novak said Russia will continue its cooperation with the Organization of the Petroleum Exporting Countries (OPEC) beyond 2025, after which the current deal on oil output curbs by the expanded group known as OPEC+ expires.