Russia’s oil revenues are falling due to the “price ceiling” imposed by Western countries on its crude oil supplies, and, ahead of further restrictions on Russian oil products, Europe is well positioned to deal with any price pressure.
Photo: presstv.ir
This was stated on Wednesday by a representative of the US Treasury Department, according to an article by Reuters.
G7 countries, Australia and the European Union are extending sanctions against Russia by setting a price ceiling on oil products such as gasoline and diesel on Feb. 5. The coalition placed a $60 per barrel cap on offshore sales of Russian crude late last year.
Russia is losing a lot of money every day because of the restriction, a senior Finance Ministry official told reporters during a teleconference.
The official did not estimate the loss of Russia’s revenue from crude oil supplies. But the cap has increased the cost of shipping some Russian oil cargo because it forces countries that want Russian oil to exceed the cap to use a shady fleet of non-Western ships and risk using “less credible” insurance, the official said.
US officials say the cap “institutionalizes” the price discounts on Russian oil sought by major oil consumers, including India and China.
Russian Urals crude for delivery to Europe was quoted at around $53.43 on Wednesday, maintaining a recent sharp discount to benchmark Brent oil, which traded at $82.67.
Russian Deputy Prime Minister Alexander Novak said on Wednesday that the country’s oil producers had no problem closing export deals despite Western sanctions and price caps.
But Novak acknowledged that the main problems for Russian oil were large discounts compared to international benchmarks and rising freight costs.
This year, several senior US Treasury Department officials met with European government officials and industry players to discuss oil restrictions and upcoming restrictions on petroleum products.
Europe can withstand pressure on oil products this winter because it has stockpiled diesel fuel and because of warmer-than-expected temperatures, a finance ministry spokesman said. As a result, some of the cheaper Russian diesel could end up being sold to countries in Africa and other places that were hit by high oil prices last year due to the conflict in Ukraine, the official said.
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