Novak: discount on Russian oil will decrease given the stabilization of the situation

The discount on Russian oil has increased due to the risks put in by buyers, but as the situation stabilizes, it will decrease, Deputy Prime Minister Alexander Novak told reporters.

“Now we see that the discount in relation to our oil has slightly increased. Naturally, because buyers are laying down risks, but given the stabilization of the situation, we think that this discount should decrease,” leads his words to RIA Novosti.

Now Russian companies are working on the necessary routes, Novak added.

Russian oil remains in demand, Novak stressed, while oil production and exports in January remain at the level of December 2022.

“We have a large share in the world in terms of exports. Therefore, of course, without Russian oil today, ensuring the energy balance is difficult to implement,” he said (quote according to TASS).

In the period from December 15 to January 14, the average price for the Russian grade of Urals oil amounted to $46.82/bbl, the Finance Ministry said earlier. In the period from November 15 to December 14, Urals oil cost an average of $57.49/bbl, and a month earlier – $71.1/bbl.

On December 5, the ceiling on Russian oil prices of $60 per barrel, introduced by the EU and G7 countries, came into force, it is expected to be reviewed every two months so that the ceiling level is 5% lower than the price of Urals. For oil products, the restriction will come into effect on February 5.

On January 11, Novak acknowledged that the introduction of a price cap led to difficulties in the form of a high discount on raw materials. Then he expressed the hope that the situation would be temporary. Russian President Vladimir Putin, in turn, urged draw attention to the situation with the discount. On the same day, the Ministry of Finance announced that the budget in January could receive less than 54.5 billion rubles. oil and gas revenues. The Ministry of Finance and the Central Bank also announced resumption foreign exchange interventions within the framework of the fiscal rule.

In turn, the Ministry of Energy admitted introduction of additional measures to counteract the price ceiling for Russian oil. In particular, they can be aimed at “limiting the possible discount” on Russian raw materials for deliveries abroad “up to the limits based on market prices.”