Speaking to state television on Friday, Novak said Russia could reduce output by 500,000-700,000 barrels per day in response to price caps introduced by the West in early December over Russia’s invasion of Ukraine.

Russia has said it will not abide by the cap even if it has to cut production.

The European Union, G7 nations and Australia introduced a $60 per barrel price cap on Russian oil, with the aim of restricting Russia's revenue.

In addition to the cap, the EU imposed an embargo on imports of Russian crude by sea, following similar moves by the United States, Canada, Japan and Britain.

Putin told reporters on Thursday he would issue a decree Monday or Tuesday on actions in response to the cap.

Novak said the decree would ban sales of oil and oil products to countries that join the price cap and companies that demand its observance.

Russia has reportedly been unable to fully redirect its oil exports from Europe to other markets.

Only four countries are now willing to buy Russian oil, including Bulgaria, China, India and Turkey.

Global oil prices are around $40 a barrel below this year's peak, and in some cases Russian oil has been sold to export markets at below production cost.