The Federation Council endorsed a Russian measure aimed at capping the Urals crude oil price when set against the global Brent benchmark for the purposes of calculating taxes. The policy, which was described in detail on the law enforcement portal, introduces a mechanism to link Urals to Brent in the framework of tax calculations for the extraction tax, the additional tax on mining profits, and the negative excise on oil products. The core idea is to apply a constant discount to Brent when determining the price used for tax assessments, with the discount value stepping down over time.
Under the new rule, if in April the Urals price proves to be more than 34 dollars per barrel below Brent, the Urals price used for tax purposes will be set at Brent minus 34 dollars. In May the discount tightens to 31 dollars per barrel, then to 28 dollars from June, and to 25 dollars starting in July. This staged reduction is designed to gradually shift the benchmark used for tax calculations away from a pure Brent parity toward a controlled, predictable pricing framework for Urals crude.
The authorities explain that the change is intended to cushion budget revenue from a potential drop in Urals price relative to Brent. The 2023 budget projections assumed an Urals cost of about 70.1 dollars per barrel, a reference point that could be sensitive to shifts in the discount mechanism. By setting a sliding discount, the government seeks to stabilize expected revenues while preserving a link to global price movements.
Records released by the finance ministry reveal that the average price of a barrel of Urals during a recent window, from mid-January to mid-February 2023, hovered around 50.51 dollars. This information, when weighed against Brent, helps illustrate how the discount policy interacts with actual market conditions and the fiscal planning process. Such data points underscore the government’s effort to manage the fiscal impact of oil price dynamics on budget financing.
Separately, large-scale international developments continue to shape the pricing environment for Russian energy. A recent agreement between major global economies and partners, including the European Union, the G7 nations (United States, United Kingdom, Canada, Japan, Germany, France, Italy), and Australia, imposes a price ceiling on Russian crude oil of 60 dollars per barrel. This regime became effective on December 5 and is complemented by a higher cap of 100 dollars per barrel on Russian petroleum products that fetch prices above crude oil, such as certain distillates, starting February 5. In contrast, for less refined fuels like naphtha and fuel oil, the price ceiling stands at 45 dollars per barrel. These measures are part of broader efforts to restrict the revenue flow from Russian energy exports and influence global energy markets. [Attribution: official statements from international regulatory bodies and trade partners]