The US and the EU have set a “price ceiling” for Russian oil at around $60 per barrel. The Urals variety has been trading slightly above this price for the last two days. However, it has become more expensive to smuggle it out, which is why Russia receives $40 from the entire sale.
Reuters writes about this with reference to its own calculations. As an investment agency, the cost to transport one barrel is $20 after the oil embargo and price caps. Therefore, at just over $60 in real terms, Russian oil sells for $40-$45 per barrel when shipped FOB from all designated ports – Ust-Luga, Primorsk and Novorossiysk.
According to Loko-Invest analysts, this puts the entire Russian oil industry on the brink of savings, since the total cost of production in Russia, including taxes and oil emissions, is about $50 per barrel. Thus, Russia is already worth $10 per barrel.
Also, the predictions of state officials that the oil market would “fly to the skies” did not come true. Brent oil quotes fluctuate around $80, and the day before they went below $80 per barrel, which is the lowest since the beginning of 2022.
The Kremlin, meanwhile, came up with three options for responding to the introduction of a “price ceiling”: a ban on the sale of oil by countries that have introduced an upper price limit, a ban on the sale of vegetables under contracts, which will set a price ceiling and introduce high discounts for Urals. None of the options was adopted, recognized by the sources of Vedomosti.