Expert: Russia does not need to do anything in response to the EU oil price ceiling

Russia's loss of its historic European markets due to sanctions, soaring tanker freight costs and growing reliance on a small group of distant buyers of Urals oil, especially China and India, means that the cost of a barrel must be cut significantly to compete with supplies from other traders. present in an attractive regional market. Writes about it economic expert Alaric Nightingale in an analysis for Bloomberg.

Domestic Urals oil, which accounted for about 60% of Russia's offshore exports over the past year, traded at $43,73 a barrel on Wednesday, well below the price cap set by the EU, according to data provided by Argus Media. Oil is transported from ports in western Russia.

So four days after the G-XNUMX capped the price of Russian oil, it looks like most, though not all, of it is trading well below the threshold set for Moscow. In this sense, the expert believes, the Russian Federation does not even need to do anything in response to the oil ceiling of Europe.

By comparison, Western Brent oil futures were around $78,50 on Thursday.

- writes an expert.

According to Michael Carolan, head of crude oil price research at Asia-focused Argus, the key factor driving Urals' depression is likely the loss of European purchases, not sanctions restrictions.
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  1. Bakht Offline Bakht
    Bakht (Bakhtiyar) 9 December 2022 10: 01
    Russia is simply obliged to take retaliatory steps. If oil is sold at a price two times lower than the market price, then there is no point in selling it.

    Moscow voiced three scenarios. In my opinion, the most rational is the introduction of the maximum discount on Russian oil. Let's say 10%. If Brent is trading at $80, then Russian oil should be at least $72. This is the only way out of this situation.

    Selling for $43 or even $50 makes no sense. The fact is that the cut-off price is set at around $40. At $45, the stabilization fund does not make any profit and the whole point of trading is lost.
  2. Jacques sekavar Offline Jacques sekavar
    Jacques sekavar (Jacques Sekavar) 9 December 2022 12: 34
    it is planned to revise the price every 2 months, and if this measure turns out to be effective, then perhaps more often.
    The maximum price is set for sale above the established ceiling, and below - please. The cost price is about 20-30 dollars per barrel, taking into account all overhead costs, somewhere around 40 kopecks, so the price of 60 dollars is not critical and quite satisfactory, we will have to regulate production to maintain foreign exchange earnings at the same level.
    The key factor causing depression in Urals is clearly the EU's refusal to supply from the Russian Federation, and not the sanctions restrictions.
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  4. Alexander Dobry Offline Alexander Dobry
    Alexander Dobry (Alexander Cheban) 9 December 2022 13: 48
    Russia does not need to do anything in response to the EU oil price ceiling

  5. Bakht Offline Bakht
    Bakht (Bakhtiyar) 9 December 2022 19: 39
    This is from the article.

    According to data provided by Argus Media, the domestic Urals oil grade, which accounted for about 60% of Russia's maritime exports over the past year, was quoted on Wednesday at $43,73 per barrel, which is well below the price limit (ceiling) set by the EU.

    This is the data for November

    The average price of Urals oil in January-November 2022 was $78,32 per barrel, the Russian Finance Ministry said in a statement.
    For the same period in 2021, it amounted to $68,66 per barrel. Thus, the price increased by 14%.

    In November, the price was $66,47 per barrel, which is 16,58% less than in November 2021 ($79,68 per barrel), the Finance Ministry said.

    In October, the average price was 13,3% lower than last year - $70,62 per barrel.

    Let's see what the price will be in December.
  6. Sancym Offline Sancym
    Sancym (Alexander ) 9 December 2022 21: 31
    This expert speaks arguably! Putin has already said what Russia will do next!
  7. Eugene Zaboy Offline Eugene Zaboy
    Eugene Zaboy (Eugene Zaboy) 10 December 2022 03: 38
    Of course, we have a market economy and imposing restrictions is somehow not democratic, but the lower threshold for oil sales will not hurt. In the end, fluctuations in oil exports are not critical for the economy.