Image: JOE KLAMAR (AFP)
“The average price of Urals oil in January 2023 was $49.48 per barrel,” Russia’s Finance Ministry said on Wednesday, according to the Interfax news agency. This corresponds to almost 60 percent of the price in the same month last year.
In December, the EU and its G7 partners agreed on a price cap for Russian oil in order to minimize Kremlin chief Vladimir Putin’s income from his war of aggression against Ukraine, which began almost a year ago.
In December, the price of Russian Urals oil was just over $50 a barrel. In January, Russia was therefore unable to benefit from the recent slight increase in oil prices on the world market because there had to be even more discounts than in December. While the discount compared to the North Sea variety Brent was 38 percent in December, it is now 41 percent.
The price cap on Russian oil set by western industrialized countries is currently 60 dollars per barrel. So $50 is way below that. According to the daily newspaper Kommersant, such an oil price is a problem for the Russian budget. For the current year, the government has expected an average price of $70 per barrel. Should Russia also have to cut oil production by 500,000 to 700,000 barrels a day because of the sanctions, as predicted by Deputy Prime Minister Alexander Nowak, the country could face a loss of income equivalent to almost 39 billion euros, according to “Kommersant”.
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