“We will not lose.” The price of Russian oil has dropped, Putin wants you not to worry Bloomberg: The price of Russian oil Urals fell to $ 43.72 per barrel

According to Bloomberg, Russian oil is trading well below the $60 per barrel threshold after a cap was imposed on it by the EU and G7 countries. The publication refers to data from the independent pricing agency Argus Media Ltd.

The Urals brand, which accounts for about 60% of Russia’s offshore oil exports, traded at $43.73 a barrel on Wednesday, December 7, according to analysts. In other words, it is 27% below the ceiling price determined within the scope of the sanctions.

Bloomberg notes that the fall in the cost of raw materials from Russia is not necessarily related to the ceiling price set by Western countries, but that this factor may still contribute to lower prices. The agency writes that the fall in the price of the Urals was likely due to a number of reasons. These include Moscow’s loss of European markets, the significant increase in the cost of leasing oil tankers, and Russia’s growing dependence on Asian buyers (mainly China and India).

At the same time, another Russian brand ESPO (“Eastern Siberia – Pacific Ocean”), which is lighter oil from the Urals, is trading at $ 68.72 per barrel on December 7, according to Argus. This is still lower than the benchmark Brent at $78.50 on Wednesday.

According to Argus spokesman Michael Carolan, the main factor causing the Ural prices to drop may be Russia’s loss of European buyers rather than the new restrictions.

“Currently, the Urals have no short-term buyers, so we have to lower prices to attract customers for long-term contracts,” Carolan said.

Argus Media Ltd forecasts. They form the basis for calculating the price of the Urals, among other things, they form the basis of the Ministry of Finance of Russia when determining export taxes. However, even Western publications noted that, for example, in 2022, due to the decrease in transparency in the pricing of Russian oil, price forecasts and forecasts of Argus and other independent companies can no longer be considered accurate, for example, the prices of long-term contracts are watched worse.

At the same time, Russian President Vladimir Putin, at the press conference held on December 9 after his visit to Kyrgyzstan, said that Russia will not lose anything after the ceiling on oil prices.

“We will not lose under any circumstances. This is not about us, it is about the general state of the world energy industry, it is harming the world energy markets. I repeat, we are already selling at these prices, don’t worry about the budget.”

He also added that special measures to respond to the ceiling price for Russian oil will be determined by a decree to be issued in the next few days. At the same time, Putin believes that such steps by the West are “stupid” and “harmful”.

“It would be foolish for everyone, including the consumer, to follow some harmful non-market solutions. Because consumers have to realize that they will insist on the price they like, and even if they succeed, prices will fall, investments will fall to zero, prices will eventually skyrocket and it will hit those who make these decisions.” Putin announced.

At the end of November, even before the ceiling price was applied for Russian oil, its price was falling below the then recommended threshold. Specifically, the Urals, which departed the Baltic port of Primorsk on November 28, were trading below $52 a barrel. But this was the cost of the raw material itself and its delivery in the tanker. This amount does not include freight, ship insurance and cargo handling costs paid separately by the merchant.