Bloomberg: Russia loses more than $170 million every day due to oil price restrictions

Russia loses $172 million every day due to oil price restrictions.

Bloomberg writes about this with reference to the report of the Helsinki Center for Energy and Clean Air Research (CREA).

According to the organization, on February 5, when restrictions will be extended to oil products, the Russian Federation will lose even more — $280 million per day. Already, flagship Russian oil is sold for more than twice below world prices.

"The EU oil ban and oil price cap have finally kicked in, and the impact is as significant as expected," said CREA lead analyst Laurie Mullivirta.

A further reduction of the limit to $25-35 per barrel would still exceed Russiaʼs production and transportation costs, but would further reduce the countryʼs oil export earnings by at least €100 million per day.

“It is important to lower the ceiling price to a level that deprives the Kremlin of taxable oil profits, as well as to limit the remaining imports of oil and gas from Russia,” Mullivirta said.

There is a possibility that Russia may cut supply. This will lead to an increase in oil prices. Russia is now looking for ways to counter the price cap, which President Vladimir Putin has called “illegal.”

According to CREA, Russia shipped €3.1 billion worth of crude oil by ships. This fuel is subject to price restrictions and most of it is taxed by the government.

Other measures, along with lowering the price cap, such as increased fines for non-compliance and additional sanctions on tanker sales, could reduce Russiaʼs fossil fuel revenues by another €200 million per day.

• In Russia, the budget deficit for 2022 has become one of the largest in history. It reached 3.3 trillion rubles ($47 billion). And oil supplies from Russia in December fell to the lowest level for the entire year 2022. This was facilitated by EU sanctions on the import of Russian oil, as well as the introduction of a price limit.