“Price ceiling set by G7 countries and EU results in significant decrease in Russia’s oil export revenues”

After the Western countries set a price ceiling for oil exported from Russia due to the invasion of Ukraine, Moscow’s revenues from oil exports have significantly decreased, the US Ministry of Finance has announced.

“Contrary to widespread market skepticism about price ceilings, market participants and geopolitical analysts have now recognized that price ceilings are achieving their goals,” the ministry said.

Due to the price ceilings set by the G7, the European Union and Australia, the revenue from oil exports will make up only 23% of the Russian budget this year compared to 35% before the war, according to a US Treasury Department report.

Referring to the data of the Ministry of Finance of Russia, it also mentions that in the first quarter of this year Russia’s revenues from oil exports were 40% lower than in January-March of last year.

Although the amount of Russian oil exports is increasing, the revenue for exported oil has decreased, the US Treasury Department concludes.

The price cap means that the G7 countries, the EU and Australia provide technical, brokerage and insurance services related to Russian oil products only if they are purchased at a price that does not exceed the level set by the cap.