Similarly, the CREA reported that Russian crude oil exports fell by 12%, with a 23% decrease in selling prices. Western measures significantly contributed to a 17% decrease in Russian revenue from oil and gas exports in December 2022. European energy costs increased by 54% in the second half of 2021, as gas prices tripled and crude oil prices reached $105 per barrel.Īccording to the news agency CNBC, the EU’s ban on Russian seaborne crude oil imports and G7 countries’ price cap imposition cost Russia an estimated $171.8m per day. GlobalData reported that the volume of oil being transferred through Russian pipelines fell 37% year-on-year in the first seven weeks of 2022. We will not accept any price caps,” according to the Russian news agency Interfax. Yet the EU became Russia’s largest oil importer in December 2022, suggesting that, for all their sanctions and statements, European governments may simply be unable to function without significant imports of Russian oil.ĭmitry Peskov, the Russian president’s press secretary, said: “A decision is being prepared. Since then, Japan, China, South Korea, Turkey and India have become the largest energy importers from Russia. The Centre for Research on Energy and Clean Air (CREA) estimates that Russia still makes around $688.3m per day from exports, which shows a significant decrease from $1,075.5m from March to May 2022. However, these caps have helped cut into Russian profits. However, the cap has allowed Russia to continue exports, with Reuters reporting in January of this year that the average price of a Russian barrel fell to $49.48, below the initial cap, rendering it largely ineffective This cap has also allowed Russia to export oil to ‘third-party’ countries, such as those outside of Europe, via G7 and EU tankers, insurance firms and financial institutions at or below $60 per barrel. The moves have aimed to keep the price of Russian oil low, to prevent Russia from making signifcant profits on their exports, while enabling Europe to satisfy its need for Russian oil. It has 23 refineries and plans to grow its refining capacity to 400 mtpa by 2025.In December 2022, the EU agreed to impose a price cap of $60 per barrel for Russian seaborne oil, before shifting the “discount” cap down to $45 per barrel in February this year. It is a key refining hub in Asia, with an installed capacity of over 249.36 million tonnes per annum (mtpa). India spent $101.4 billion on crude oil imports in 2019-20 and $111.9 billion in 2018-19. So it made good sense to source light sweet crude from the US, especially as arbitrage economics was viable," said Lim Jit Yang, adviser for oil markets for Asia-Pacific at Platts Analytics, in a statement. “India's demand for lighter products such as LPG, naphtha and gasoline has been doing a lot better than middle distillates such as gasoil, kerosene and jet fuel. Following the covid outbreak, crude prices for Indian basket of crude had plunged to $19.90 in April before recovering to $61.22 a barrel in February, data from the Petroleum Planning and Analysis Cell showed. The cost of the Indian basket of crude, which comprises Oman, Dubai and Brent crude, was at $65.19 a barrel on 18 March. India is particularly vulnerable as any increase in global prices can affect its import bill, stoke inflation and widen trade deficit. India signed the first term contract for crude oil sourcing from Russia in February last year, with state run Indian Oil Corporation (IOC) and Rosneft inking the agreement for 2 million metric tonnes (mmt) of Urals grade crude. India is also eyeing more long-term crude oil contracts from Russia. This also comes at a time when India is leaning on its old energy partner Russia to cushion its consumers from price shocks, with the two countries exploring an approach to protect both the buyer and seller from the sharp volatility in global prices as reported by Mint earlier. Iraq retained its position as the top supplier, with shipments of 2.89 million mt in the same month," the Platts statement added. “In February, inflows from the US was 2.11 million mt, about 32% higher than 1.61 million mt inflows from Saudi Arabia. With domestic petrol and diesel prices at record highs, India had expressed its displeasure to Opec for ‘backtracking’ on its commitments. India’s evolving energy security playbook comes at a time when global crude oil prices have surged after the Opec-plus grouping’s decision to retain supply curbs.
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