Russia’s Oil Earnings Downturn To Six-Month Low

Expanding discount rates for Russian grades and lower global criteria costs dragged Russia’s oil export profits to a six-month low in December, in spite of greater export volumes, the International Energy Company (IEA) stated on Thursday.

All Russian oil exports, consisting of crude and fuels, leapt by 500,000 barrels daily (bpd) to 7.8 million bpd in the last month of 2023, compared to November, the IEA stated in its Oil Market Report for January. This was the greatest export level in 9 months, with petroleum deliveries leaping by 240,000 bpd from November to 5 million bpd, and oil item exports increasing by 260,000 bpd month-on-month.

In spite of the greatest export volumes in 9 months, Russia’s approximated export profits plunged to their least expensive level in 6 months, to $14.4 billion, the IEA stated. The decrease was the outcome of increased discount rates of Russian oil costs compared to criteria and the total decrease in global criteria costs.

The cost of Russia’s flagship crude grade, Urals, dropped in early December to listed below the G7 cost cap of $60 per barrel after the U.S. strengthened the enforcement of the sanctions on Russian oil exports.

The harder enforcement of the G7 sanctions aims to have actually developed problems for Russia in putting some its crude in some markets, particularly among its leading markets, India.

The strengthened enforcement and associated problems have actually been holding up Indian purchases of some freights of Russian petroleum, with tankers formerly headed to India now reversing eastwards, tanker-tracking information kept track of by Bloomberg revealed previously this month.

A few of those tankers were currently en path to India packed with Russia’s Sokol grade and left from the Far Eastern ports in Russia.

At the end of in 2015, the United States took a harder position on the sanctions versus Russia and approved numerous vessels for breaching the G7 cost cap of $60 per barrel, above which freights can not utilize Western insurance coverage and funding.

By Tsvetana Paraskova for Oilprice.com

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