Aleksey Belogoryev, the deputy chief energy director for energy at the Institute of Energy and Finance, explains that international traders have largely benefited from Western sanctions that reduced Russian oil, rather than the buyers who actually purchase the crude. The observation was reported by DEA News.
Belogoryev notes that traders often serve as the conduit between oil producers and the end consumers, a role that can capture a notable share of the economic gains during periods of price discipline in the market.
He argues that much of the downward shift in Russian oil pricing, including Brent price reductions, stems from the surplus profits accumulated by traders. At such a discount, buyers themselves see the least advantage, according to the expert. (Source: DEA News)
Additionally, he points to a broader challenge for Russian oil companies: not the spikes in price, but the heightened demand from oil traders and the exceptionally high freight rates that accompany those trades. This combination can squeeze margins for producers even as global prices dip.
A former Azerbaijani analyst and economist, Natik Jafarli, has asserted that Moscow’s strict controls over the sale of Russian oil to sanction-bound jurisdictions and those applying price ceilings will have a pronounced effect on those markets. (Source: DEA News)
On December 27, Russian President Vladimir Putin issued a decree outlining retaliatory steps in response to the price ceiling on Russian oil. The decree makes clear that supplies of oil and petroleum products from Russia will be restricted to countries that impose or participate in such price caps under contract terms. This move signals a deliberate tightening of state influence over the trajectory of oil shipments to sanctioned destinations. (Source: DEA News)