What's with your face, Putin?
The price of Russian Urals oil has fallen to USD 37.5, but this isn't a typical fluctuation in oil prices
At the same time, Brent oil is trading at USD 81. This means that the price of Russian oil fell! From the end of November, Russian oil began to be sold under a separate scenario. There are several reasons for this phenomenon, and all of them are very pleasant for us.
Firstly, this is the result of self-sanctions. Putin, who signed a decree prohibiting the sale of oil to countries that supported sanctions, cut off the price himself. I think a ceiling of USD 60 is a very good price, at today's prices. And today's price is already approaching the cost limit of USD 30-35.
“This is the result of self-sanctions. Putin, who signed a decree prohibiting the sale of oil to countries that supported sanctions, cut off the price himself.”
Secondly, it is freight. The freight rate for Russian oil has increased significantly, especially after the sanctions imposed on December 5 banning the transportation of Russian oil by sea.
Thirdly, Putin's new "friends" India and China, like real friends, decided to make use of him. Realizing that he has nowhere to turn, the Indians and Chinese artificially drive down the price. In addition, the US is closely monitoring that Russian oil is not oversold.
Thus, the Russians will be forced to reduce oil production in order to raise the price. But the reasons listed above are unlikely to help them in this.
“Putin's new "friends" India and China, like real friends, decided to make use of him. Realizing that he has nowhere to turn, the Indians and Chinese artificially drive down the price.”
The good news does not end there. Since February 5, sanctions have been imposed on Russian oil products (diesel, fuel oil, etc.). This, in fact, will deal a serious blow to oil refining and, again, to production volumes. Another important piece of news is that the United States has eased sanctions against Venezuela and refused to recognize opposition leader Guaidó as acting president. On January 1, a Chevron tanker arrived to load Venezuelan oil. This happened for the first time in 4 years.
Andrian Prokip, an expert at the Institute of the Future, believes that in 2023, the loss of Russian oil revenues compared to 2021 could amount to 46%.
Well, how is there a “war of attrition”? What's with your face, Putin?
About the author. Viktor Andrusov, political and public figure, analyst.
The editors do not always share the opinions expressed by the authors of the blogs.