Spot – currency – reference The price of Russian oil Urals fell below $ 52 per barrel. About knowledgeable Bloomberg cites data from independent agency Argus Media Ltd. The publication states that at the moment one barrel of this brand is below the ceiling that EU countries propose to set for Russian oil and oil products.
The oil price started to drop on Friday. On the evening of November 28, it reached $51.96 a barrel. At least we are talking about prices at two oil centers in the Baltic port of Primorsk and the Black Sea Novorossiysk.
Argus Media Ltd. It is an independent pricing agency whose forecasts for Ural prices are simple. The Russian Ministry of Finance relies on them when calculating export taxes. At the same time, the $51.96 price includes only the cost of the raw material itself and delivery to the tanker. Freight does not include ship insurance and cargo transportation costs – the buyer (merchant) pays separately.
As Bloomberg points out, price projections from Argus and other independent organizations are now approximate due to reduced transparency in pricing for Russian oil in 2022. In particular, long-term contract prices are watched worse. The media reported that Russia is now offering a high discount for the Urals to importers from China and India. Argus and another pricing organization, Platts, stated that discounts go up to $30 per barrel. However, on November 23, analysts at Goldman Sachs questioned such a large price cut for Indian and Chinese buyers – they believe the actual discount in October did not exceed $10 a barrel.
EU countries failed to agree on the exact parameters of the marginal price of Russian oil the previous day, the Financial Times reported. Most EU members are pushing for the $65-$75 per barrel range. Poland is demanding a lower price stream – $30 – justifying its position by saying that the maximum price now fetched will be higher or close to the current market price. According to Politico, the Baltic states do not set the bar higher than $60 a barrel.
At the same time, some European countries, on the contrary, maintain the highest possible ceiling price for Russian oil. Among them is Greece, which, according to Western media, has the largest number of oil tankers in the world. Another competitor to low marginal prices is Malta.
According to Politico and Bloomberg, the debate on the price range of Russian oil among EU countries could resume this week. Under EU law, all 27 members must vote for the resolution. Parallel to this, the ceiling price is being discussed in the G7. The Wall Street Journal wrote that the US maintained a high enough price bar during this period so that Russia could continue to export raw materials and not cause a shortage in the market and a rise in prices.
The same restriction on the Urals should come into effect from December 5, and for Russian oil products from February 5, 2023. This is provided by the eighth package of anti-Russian sanctions. On November 24, the Kremlin described the figures discussed by the EU as an inexplicable price ceiling.
“All of this is subject to deep analysis. Indeed, there are incomprehensible figures among Europeans, which are called very incomprehensible nuances according to this ceiling. It seems that they are trying to decide for the sake of a decision, ”said the press secretary of Russian President Dmitry Peskov.
President Vladimir Putin said in September that Russia would not supply oil and other energy resources to countries that would support ceiling prices.
“There are contractual obligations. Will any decisions of a political nature be taken contrary to the conventions? Yes, we will not fulfill them. In general, we will not supply anything that is contrary to our interests. In this case, it’s economical. We will not give gas, oil, coal, fuel oil, we will not give anything,” he said.
In November, Deputy Prime Minister Alexander Novak, who oversees the country’s energy industry, announced that this position was retained. According to him, Moscow plans to remain a reliable supplier, but strictly within the framework of pre-contracted and market laws. And if some countries impose a price ceiling, Russia will either divert its supply to other buyers or reduce oil production.
Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.