Page 110 - RusRPTFeb23

freight price, Deputy Prime Minister Alexander Novak said at a government meeting headed by President Vladimir Putin on January 11, adding that the situation is likely to be temporary, with the discount decreasing in the future.
"I hope the situation will be temporary. The discount is to decrease after a while as we saw in 2022 when the discount surged in March-April and later started falling gradually, decreasing two-fold," he explained.
"Currently the main risk is the discount I guess, followed by embargoes being imposed on supplies of petroleum products and the price cap being introduced," Novak added.
Russia’s energy ministry said earlier that it did not rule out additional measures on restricting a possible discount on the Russian oil to the market-based levels, adding that it would monitor oil prices and the amount of discount.
Earlier, Bloomberg said citing the Argus Media statistics that the discount on Russia’s Urals oil compared to Brent had surged to 50%. On January 6, the oil price in the Baltic port of Primorsk was $37.8 per barrel, whereas the price of Brent crude oil on the same day totaled $78.57 per barrel, the agency said.
Singapore has become one of the main centres for legally circumventing sanctions against Russian oil, Bloomberg found out. Oil traders fill reservoirs on the island with ultra-cheap Russian oil products to mix them with other grades, thus “clearing” sanctions risks, and re-export them to other countries. The profit from such operations is about 20% - twice the usual trader's margin.
The average price of Urals oil in January-December 2022 was $ 76.09 per barrel, in January-December 2021 - $69.0 per barrel. The average price of Urals oil in December 2022 was $50.47 per barrel, which is 1.44 times lower than in December 2021 ($72.71 per barrel.
Russia could slash oil production by 5-7% in early 2023 as a result of Western price caps on Russian crude and refined products and Moscow’s retaliatory ban on countries that comply with the restrictions, Russian Deputy Prime Minister Alexander Novak announced on December 23. Russia accounts for a tenth of global oil output and is the world’s second-biggest oil exporter after Saudi Arabia, and so Western sanctions and the Kremlin’s response to them could have major implications for global energy supply. Moscow has provided tax breaks to new fields that support output and generate revenue for the state budget, but mature deposits that do not enjoy this support could suffer.
Russia sells oil at $50 to India and China. The average oil price of the leading Russian brand, Urals, in December 2022 fell to $50.47 per barrel. This is 30.6% lower than in December 2021 ($72.71), the Russian Ministry of Finance reported.
110 RUSSIA Country Report February 2023 www.intellinews.com