© Reuters Agency: G7 oil price cap causes Russia to lose $170 million a day, subsequent losses could increase
January 11 Financial Associated Press News (Edited by Liu Rui)Russia is losing $172 million a day in lost revenue after the G7 imposed price caps on Russian oil, according to a Finnish research institute.
The agency also expects Russia’s daily revenue losses to widen after the Feb. 5 price cap measure is extended to include refined products.
Price caps affect Russian government revenue
In order to limit Russia’s oil revenues, the G7, the European Union and Australia previously agreed that from December 5, 2022, the price of Russian seaborne oil will be capped at $60 per barrel. At the same time, the European Union’s ban on Russian oil came into effect, officially banning the import of Russian crude on December 5 last year.
The Center for Energy and Clean Air Research (CREA) in Helsinki, Finland said Russia has so far exported more than $3.3 billion worth of crude oil within the price cap, most of which it was taxed by the Russian government. The cap cuts Russian government revenues by an average of $172 million a day.
CREA said in the report that from February 5 this year, once the price cap on refined products is extended, Russia’s daily loss of revenue will rise to 280 million US dollars.
CREA says the study provides further evidence of the impact of restrictions imposed by Group of Seven (G7) nations and related EU sanctions on Russia. Russia’s top crude, Urals, is currently trading for less than half international crude prices.
“The EU oil ban and oil price cap are finally taking effect and the impact is as significant as expected,” said Lauri Myllyvirta, chief analyst at CREA.
The G7 could further curb Russian revenues
CREA said the EU should try to further step up the pressure on Russia. If the G7 further lowers the oil price ceiling from $60 to $25-35 a barrel, it will still be higher than Russia’s production and transportation costs, but it will reduce the country’s daily oil export receipts by at least another $100 million. yuan, the agency said EUR.
“It is necessary to lower the price ceiling to a level that deprives the Kremlin of oil profits and limits remaining oil and gas imports from Russia,” Milivirta said.
CREA also said that if the G7 imposed price caps along with other measures, such as tougher penalties for non-compliance and additional penalties on tanker sales, it could cut Russia’s fossil fuel revenues by another 200 million euros a year. day.
However, CREA’s proposal could actually be difficult to implement. While the G7 could further tighten restrictions on Russia, Russia can also drive up international oil prices by cutting energy supplies, a move the Russian government has repeatedly threatened to take.
Once Russia adopts this approach, Europe and the United States will be forced to face higher energy costs and further increase their already high inflation.
Russian President Vladimir Putin said in recent days that the G7 price cap measures are “illegal” and Russia is looking for ways to exceed the limit.
