Supply shortages of Russian Ural oil, increased demand for fuel from China and India, and the redirection of domestic raw material sales to Asia instead of Europe led to the exceeding of the $60 per barrel “price ceiling.” This opinion was expressed by BitRiver financial analyst Vladislav Antonov in a conversation with socialbites.ca.
“It is possible in principle for Russian Ural oil to exceed the $60 “cap price” set by the West in August at $70 per barrel, according to the IEA. “The decrease in Russia’s oil production and exports due to sanctions and restrictions caused the Urals shortage and the resulting increase in fuel prices,” he said.
The analyst also stated that China and India increased their purchases of Russian oil, and the increased demand also contributed to the rise in prices. Russia’s focus on new markets in Asia rather than Europe has increased logistics and transportation costs, he said.
According to Antonov, for Russia, exceeding the “price ceiling” means the opportunity to earn more revenue from oil sales, despite the restrictions. This increases the exporter’s income and therefore the income to the budget. Additionally, the analyst believes that if prices remain high, oil supplies from the United States and other countries may increase, which will increase competition.
“Exceeding the ceiling is a temporary phenomenon due to the current situation in the oil market. In the long term, Russia needs to increase supplies to Asia and optimize logistics to reduce production costs,” Antonov confidently says.
According to him, the price ceilings in Western countries did not work. The expert said that bets that Ural oil prices would fall failed; He noted that Russian oil continues to be actively purchased by China, India and the BRICS countries, most of which resell Russian oil products to Western countries.
“The rise in oil prices in the global market is likely to continue. Russia brilliantly managed the new reality and the intentions of Western countries almost came to nothing. At the same time, Brent barrel is moving towards $100, the ceiling has been broken. Next up is the penthouse and the sky,” Antonov summarized.
According to the latest data, the barrel of Ural is 76.50 dollars and the barrel of Brent is 92.51 dollars. Discount is $16.
Previously “socialbites.ca” saidWhat will happen to oil prices in the autumn?