Russian oil prices fall to lowest level since start of war — Bloomberg
Illustrative photo: Russian oil prices fall to lowest level since start of full-scale war (Getty Images)
Russian oil prices have fallen to their lowest level since the start of Russia’s full-scale war against Ukraine amid tighter Western sanctions and a drop in global prices, Bloomberg reports.
According to the outlet, mounting sanctions pressure is making it increasingly difficult for Russia to sell and transport its oil. Restrictions are also affecting refineries in key buyer countries, including India, forcing Russian exporters to offer steep discounts.
Argus Media estimates that the average price of Russian oil exported from Baltic and Black Sea ports, as well as from the eastern port of Kozmino, is just over $40 per barrel.
This is 28% lower than the average over the previous three months. Prices have also come under additional pressure following recent sanctions against Rosneft and Lukoil.
At the same time, global oil prices are declining. On December 16, global benchmark oil prices fell below $60 per barrel for the first time since May. Bloomberg estimates that the drop in oil revenues poses serious risks to Russia's budget, as income from oil and gas exports accounts for about a quarter of state revenues and is crucial for financing the war.
In October, the United States imposed sanctions on Russian oil giants Rosneft and Lukoil, as well as 36 of their subsidiaries, in an effort to push the Kremlin toward negotiations over Ukraine. Shortly afterwards, the market value of both companies fell sharply, forcing them to begin selling off foreign assets.
In addition, China's largest state-owned refiners suspended purchases of ESPO crude following the US sanctions. India has taken a similar stance.
Media estimates suggest that around 48 million barrels of Russian oil could remain stranded at sea due to US restrictions, leaving dozens of tankers searching for alternative ports to unload.
