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Russian oil: EU ban and price cap costing Kremlin €160m a day

By Angela Barnes

14:37, 11 January 2023

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Oil platform at sea on the background of the Russian flag
Russia is still making an estimated €640m per day from exporting fossil fuels – Photo: Getty

The EU oil ban and price cap is costing Russia millions as the sanctions against the Kremlin for its war on Ukraine continue to take its toll on the country’s economy.

Brent crude oil price chart 

That’s according to the Centre for Research on Energy and Clear Air (CREA), that highlighted in a research report on Wednesday that the fall in shipment volumes and prices for Russian oil has cut the country’s export revenues by €180m per day. 

“Russia managed to claw back €20m per day by increasing exports of refined oil products to the EU and to the rest of the world, resulting in a net daily loss of €160m,” CREA said.

It was also noted that Russia’s earnings from fossil fuel exports fell 17% in December, the lowest level since the start of the conflict. 

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US crude oil (WTI) price chart 

How much money is Russia making from oil?

CREA said Russia is still making an estimated €640m per day from exporting fossil fuels, which is down from a high of €1000m in March to May 2022.

“The EU’s ban on refined oil imports, the extension of the price cap to refined oil and reductions in pipeline oil imports to Poland will slash this by an estimated €120m per day by 5 February,” the report added.

From shipping crude oil on vessels covered by the price cap, Russia has so far made €3bn, resulting in approximately €2bn in tax income to the Russian government.

“This tax income can be eliminated almost completely by revising the price cap to a level that is much closer to Russia’s costs of production,” CREA set out.


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Oil - Crude

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Overnight fee time 22:00 (UTC)
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1,925.64 Price
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Short position overnight fee 0.0085%
Overnight fee time 22:00 (UTC)
Spread 0.30

Russia is yet to source alternatives to vessels owned and/or insured in the G7 for the transportation of its crude from Baltic and Black Sea ports – and in the Pacific is continuing to use UK-insured tankers to sell oil to China, where the market price for it is above the price cap level.

Who are the biggest importers of Russian commodities?

Before additional sanctions, the EU remained the largest importer of oil from Russia in December.

However, this will have since changed as Germany stopped importing Russian pipeline oil at the end of December. Moreover, the EU oil products ban enters into force in February.

Japan was the largest importer of liquified natural gas (LNG) from Russia as European buyers cut purchases, while China, South Korea, Turkey, India and Japan were the largest importers of coal, the report also found.

Oil price volatility into 2023 

Sky-high fossil fuel prices in 2022, partly prompted by Russia’s war in Ukraine, generated a short-term windfall for the Kremlin. Although that is now changing due to the sanctions – and because of the reduction in fossil fuel consumption prompted by the high prices.

Oil prices remain volatile, however, and look set to stay that way in 2023.

As reported by on Tuesday, in addition to the energy crisis and the conflict in Ukraine, other factors currently impacting the price of oil include China reopening its economy and the fear of further rate hikes in the US.

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