Page 84 - RusRPTAug23

9.0 Industry & Sectors 9.1 Sector news
9.1.1a Oil & gas sector results
July 2023 was the first month when both the Russian Ministry of Finance and the international agency Argus officially acknowledged that Russian oil, not just in some cases, but on average, is sold above the price ceiling set by the G7 of $60 per barrel. On August 2, the Ministry of Finance reported: the average price of a barrel of Urals in July was almost $65. Washington still refuses to admit that the price cap idea was a failure.
The average price of Russian Urals oil in July 2023 was $64.37 per barrel, the Ministry of Finance reported today. That's almost $9 more than it was in June and just $16 less than the northern European benchmark Brent was worth in July. July 2023 was the first month since the spring of 2022 when the Urals discount to Brent fell below 20%, Interfax notes. Russian oil is growing in price a little faster than Brent (it went up from $74.71 in June to $80.07 in July).
The fact that the price ceiling would not work in the face of a sharp reversal of Russian oil exports to Asia was immediately doubtful. India, which did not join the ceiling agreement, became the main new buyer of Russian oil, and Russian oil companies quickly began to create a “shadow fleet” capable of replacing European (primarily Greek) carriers.
Already by February 2023, documentary evidence appeared that the real price of transactions with Russian oil was higher than the price ceiling and quotes of the British Argus agency, which the market and Russian officials traditionally focused on. The Ministry of Finance continued to rely on the Argus figures until spring, but since April began to raise the official price to increase the basis for calculating taxes for oil companies. Argus estimates over the past months have also come close to reality (the agency estimates the cost of Urals in July at $64.21 per barrel). Thus, the current Urals price is above $60, an official statement of a fact known since February-March: Russian oil is sold above the price ceiling.
The United States and the European Union failed to fully use their position in the market for oil transportation and marine insurance to put pressure on Russia, the WSJ states. Russian oil companies were able to quickly create a "shadow fleet" - in the second quarter of 2023, 5 times more ships transported sanctioned oil than at the end of 2021, and 80% of these tankers carried Russian oil, the Vortexa tracking company reports. The same thing happens with insurance: before the introduction of the ceiling, all shipments of Russian
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