The price of Russian oil Urals fell below the ceiling set by the West
The average price of Russian Urals oil in December 2022 fell to $50.47 per barrel, which is 1.44 times lower than its price in December 2021. About it story on the website of the Ministry of Finance.
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For comparison: March futures on the benchmark Brent brand at the time of publication (17:18 Moscow time) were trading at $78.28 per barrel, February contracts for WTI oil were worth $73.11 per barrel.
Compared to the values of November ($66.47 per barrel), the price of Urals fell by 24% last month. The average price for Russian oil for the whole of 2022, according to the mentioned ministry, is higher than the premium of $76.09 per barrel, which is 10% higher than in 2021 ($69 per barrel).
The price of $50.47 per barrel was lower than the Western countries, the limited release of oil from Russia. The G7 countries, the EU and Australia have decided to lower the price of Russian oil delivered by sea to $60 per barrel. The ceiling is in force on December 5th.
At the same time, Western restrictions take into account FOB (free on board) export prices, when the seller takes only part of the costs of transporting and insuring oil (until the goods are delivered on board the cargo ship). The Ministry of Finance’s price includes the costs of insurance and transportation to the destination, and excluding these costs, the price of Urals was even lower.
Oil exports from Russia in the last four weeks of 2022 fell to their lowest level since it began, Bloomberg writes, citing ship location data agencies tracked. According to them, offshore oil reserves in Russia in December fell by 117,000 barrels per day, to 2,615 million barrels per day on average. Transneft says that bad weather prevented sea supplies of raw materials. However, the shortage of vessels after the imposition of the EU embargo used by the agency may also play a role.