US Treasury: Russia’s revenues declined due to oil price ceiling

After the introduction of the price ceiling on Russian oil, Russia’s revenues have significantly decreased, a representative of the US Treasury said at a briefing, reports Reuters. In addition, the European Union has enough fuel and, in a relatively warm winter, does not need to purchase Russian oil, according to the American department.

The representative of the American department added that in connection with the introduction of the price ceiling, Russia sends its oil to India and China at a large discount. At the same time, the Ministry of Finance noted, in the future Moscow will have to supply surplus oil at a low price to African countries and other states that have suffered the most from the increase in the cost of a resource in 2022.

From December 5, 2022, the European Union, the G7 and Australia introduced a cap on Russian oil prices of $60 per barrel. In response, Russian President Vladimir Putin banned the sale of oil under contracts that would specify a price ceiling. Exceptions are possible with the special permission of the head of state. From February 5, it is planned to introduce a price ceiling for Russian oil products. According to CREAlimiting oil prices costs Russia $172 million a day.

Bloomberg reportedthat on January 6, Russian Urals oil traded at $37.80 per barrel. The agency explained this by Russia’s dependence on China and India, where the main supplies went under the price ceiling. Vladimir Putin instructed Deputy Prime Minister Alexander Novak to create a mechanism by which it will be possible to reduce the impact of oil discounts on the budget. By forecasts Ministry of Finance of the Russian Federation, the volume of lost oil and gas budget revenues in January will be at the level of 54.5 billion rubles.

Read more about the risks of low oil prices – in the material “Kommersant” “The budget is in danger of underfilling.”

Lusine Balasyan