Economist Maslennikov predicted the abolition of the price ceiling for Russian oil

Enforcing sanctions on energy supplies is becoming too expensive and dangerous

The American government has threatened to impose tough measures for Russia’s failure to comply with the price limit for oil exports above $60 per barrel. As stated by the head of the US Treasury, Jeannette Yellen, Washington is closely monitoring the implementation of the “ceiling” introduced by Western countries and demands the same from buyers of energy resources from our country. Meanwhile, the Russian export brand Urals is already trading at a price above $83 per barrel. We learned from Nikita Maslennikov, a leading expert at the Center for Political Technologies, whether America will be able to carry out its threat and come up with some new restrictions against our country.

– How do current restrictive measures affect oil exports from Russia?

– Quite weak. This is confirmed by the average export prices of Russian raw materials, which far exceeded the “ceiling” set by the West and a noticeable change in the geography of supplies. States friendly to Russia are increasing purchases of our hydrocarbons, not paying attention to the price conditions set by the EU and the USA. In addition, now the aggravation of the conflict situation in the Gaza Strip is fueling the cost of raw materials, and sales of Russian fuel against the backdrop of a possible decrease in supplies from the producing states of the Middle East, primarily from Iran, are only increasing. In particular, Asian consumers have increased their demands for Russian oil, not only through available pipeline systems, but also by sea. The struggle for fuel has intensified between importers of hydrocarbons – the reduction in the supply of raw materials declared by the main OPEC+ participants, including Russia and Saudi Arabia, is fueling the market deficit.

– Nevertheless, a threat was made from Washington. Should we be afraid of them?

– Statements about increasing pressure on the Russian mining industry, apparently, are made out of inertia. The initiators of such restrictions believed that such restrictions would remain in place for a long time, but after several months they realized that the initially proposed schemes would not work for long. Exports of raw materials from Russia are slowly recovering and, against the backdrop of rising global prices, are bringing our country quite a good profit. On average, the price of domestic hydrocarbons is high, which has allowed us to collect up to 800 billion rubles in oil and gas revenues this year, exceeding the planned volume budgeted.

– But they still threaten with sanctions… What new measures could there be from the West?

– According to Western states, tankers carrying Russian oil are prohibited from entering European ports. Foreign ships that agree to transship our hydrocarbons at sea are monitored by location systems. However, this design does not interfere with supplies – in the last week of September, Russia exported about $4.7 billion worth of fuel, and about 40% of the supplied raw materials were transported on ships owned by Western companies. Controlling the transportation of raw materials is easy only in words, but in practice it is either very difficult to implement, or such operations will require extraordinary expenses.

Most oil market experts, even before the announcement of the price ceiling, argued that after reloading raw materials on the high seas and mixing Russian hydrocarbons with similar products from other producing areas, it would be impossible to determine the region where the resources were produced. Continuing and strengthening control over the movement of sea vessels requires a reorientation of satellite navigation of Western space systems, which could lead not only to further economic destabilization, but also to undermining the defense capabilities of the states that imposed sanctions.

– How do you think the situation on the global oil market will develop in this regard?

– It looks like Brent will cost above $100 by the end of the year. On the one hand, there is a possibility that the discount of the Russian Urals grade to the North Sea Brent mixture will again increase to $12-15 per barrel (currently the discount is about $6-8). Everything will depend on the settlement of the situation in the Middle East and how much Iran, which has serious mining and export capacities, will be drawn into this conflict. If quotes on international exchanges rise, then the developers of the “ceiling” on Russian oil will have a new, and very difficult, task. They will either have to reduce the restrictive qualification, because without raw materials from our country, many world consumers risk facing a fuel shortage; or once again reshape the global hydrocarbon market so as not to face energy chaos.

The crisis of the “ceiling” in relation to Russian oil is becoming a new, rather unpleasant problem of the modern oil market. It is likely that due to the lack of supplies from the Middle East region, the talk about tightening or even maintaining restrictions on prices for “black gold” from our country will, in principle, lose its relevance.