Russia sells oil 30% cheaper than the limit of $60/barrel

Four days after the G7 countries limited the price of russian oil, part of the raw materials from russian federation is trading below the established threshold level.

On Wednesday, Urals oil, which accounted for about 60% of russia’s seaborne exports last year, traded at $43.73/barrel, Bloomberg reports citing Argus Media data.

Due to the sanctions, russia lost its traditional European markets. There was also a rapid increase in the cost of freight and increased dependence on a small group of buyers of Urals oil (for example, China and India). As a result of these factors, the terrorist country is forced to reduce the price of oil for sale in order to remain competitive.

Prices for another russian grade, VSTO, fell to $68.72/barrel on Wednesday. Both grades are trading well below Brent futures, which were around $78.5/barrel on Thursday.

According to Michael Carolana, head of oil prices in the EMEA region at Argus, the main factor affecting the decline in the price of Urals oil is most likely not the price cap, but Russia’s loss of European buyers.

The mechanism of the threshold price level for russian oil will be reviewed every two months in order to respond to the development of the market situation. Limits will be set at least 5% below the average market price for russian oil and oil products.

In russia, they say that they do not plan to adhere to the “price ceiling” and claim that the restrictions are not market-based and will have “serious consequences for the world oil market.”