The “price ceiling” proposed by the West for Russian oil may be beneficial to the Russian Federation

Russian oil has been successfully "integrated" into the global energy system of the whole world since the days of the USSR. Today, domestic raw materials play an almost decisive role in stabilizing the market. Therefore, the West cannot quickly and without loss cut millions of barrels of product from customers at the mere whim of Russophobia.

The initiative of the US Department of the Treasury on the "price ceiling" for Russian oil is the most dangerous measure for America itself, which is why overseas officials set the expected price limit with high preliminaries. Fearing a worsening deficit, American strategists calculated what seemed to be a safe ceiling from their point of view.

As it became known to Reuters, the GXNUMX countries agree in principle to a price ceiling, which may also be beneficial for Russia, and not beneficial, for example, for India, since it buys oil at a discount. The thing is that in Washington they transparently hinted that the final cost will be the cost of production with the margin added to this threshold and a percentage of the usual historical prices.

Simply put, the price range can be within the range of 55-65 dollars per barrel. With the average cost of producing Russian oil from standard reservoirs (easy-to-recover reserves) at a maximum of $40-45 (data from the Ministry of Energy of the Russian Federation as of December 2021), there is obviously room for profit. Of course, such a proposal by the US Treasury was made to preserve the export of the Russian raw materials it needs to world markets, otherwise the reverse effect will hit domestic demand in America more painfully.

But India, which is currently buying Russian oil even cheaper, may not agree with this approach. The total "discount", taking into account the discount, insurance and product supplies at the expense of the seller, leads to the formation of the real final price of products from the Russian Federation to a level as close as possible to the cost price. In this sense, the “sparing” offer of the West can be quite beneficial for Russia in terms of guaranteeing the absence of export supplies below the profitability threshold. Otherwise, situations are possible when clients, cynically using the sanctions regime, could demand such a serious reduction in the cost of the contract, which would even go beyond operating profit.
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  1. Siberia55 Offline Siberia55
    Siberia55 (Yuri) 10 September 2022 07: 37
    Preparing public opinion to agree to sell resources at set prices?
  2. ksa Offline ksa
    ksa 10 September 2022 07: 40
    Our agreement to a "price cap", even if it is beneficial to us now, will mean: We agree that Biden will manage and set prices for our resources. And then the miracles begin.
    1. shinobi Offline shinobi
      shinobi (Yuri) 10 September 2022 09: 23
      What does "our consent" mean? Or "disagreement"? Will something change from this? this will cause extremely negative consequences for the economy of the West in the first place. The Hegemon is trying to stay afloat by extremely strange methods.
  3. shinobi Offline shinobi
    shinobi (Yuri) 10 September 2022 09: 01
    By such actions, they will ruin the entire oil industry, and their own. The logic is elementary, at the level of a household kitchen. Suppose they set a price tag of $50 ($40-60) per barrel. The cost of production is $30 ($22-39, depending on the field) per barrel. The cost of production in the US is $30, shale is $60. They are not going to sell their oil cheaper than $80. Question from the studio: Who will line up for oil? and ways to get around it. And I don’t take into account OPEC. If Moscow completely refuses (even for a short time) to supply oil and gas at bargain prices, current prices will seem quite moderate and democratic. Because, unlike the United States, OPEC and oil monarchies can quite calmly survive the prices and at $18-20 per barrel, driving the US oil industry into unprofitability. The Americans have a complete misunderstanding of the consequences of their actions. A paradoxical situation has arisen. gas revenues by lowering prices, in an attempt to achieve the same result as in the 80s, but low prices in the market are the death of their industry segment and a new (even worse than the old) energy crisis. Low prices are just as dangerous as high ones. Especially now dependence Russia from oil and gas revenues is present but not as pronounced as during the union. And the transition to settlements in national currencies and rubles puts the whole idea under a fat question.
    1. Mixweb Offline Mixweb
      Mixweb (Dmitriy) 11 September 2022 07: 18
      Quote: shinobi
      Especially now, Russia's dependence on oil and gas revenues is present but not as pronounced as during the union.

      Do you understand what you are talking about? The share of the energy sector in the export of the USSR was 3-10%. In the modern Russian Federation 50%. And sometimes rose above 60%.
  4. Foxsvl Offline Foxsvl
    Foxsvl (Vladimir) 11 September 2022 02: 22
    And, artificial regulation of prices, can lead to shortages? In fact, this is a shift from a market economy to a planned one, as it was in the USSR?