Russian oil fell in price to less than $40/barrel

The price of russian oil is currently twice as cheap as the world’s leading grades. Also, the value of Rosneft fell to a level lower than the limit, which was introduced by the G7 countries to limit moscow’s income.

On Friday, January 6, the price of Urals oil in the port of Primorsk on the Baltic Sea was $37.8 per barrel. On the same day, the global benchmark Brent traded at $78.57 per barrel, Bloomberg reports.

The publication predicts that due to a sharp drop in the price, Russia may reduce oil production.

It will be recalled that since December 5, the “Big Seven” countries and Australia introduced price restrictions for russian oil delivered by sea to $60 per barrel. At the same time, EU sanctions came into force, prohibiting the import, purchase and transportation of russian oil to the EU and third countries.

According to the restrictive mechanism, the ban will not apply to the provision of professional assistance, intermediary services and financing for the transportation and trade of Rosneft, which is sold to countries outside the EU at a price lower than the threshold.

As Bloomberg notes, EU sanctions make russia increasingly dependent on its main buyers — India and China. Due to the fact that Rosneft tankers now cover longer distances on their way to these countries, the cost of freight has increased. This forces the price to decrease so that russian oil can compete with Middle Eastern raw materials.