Price limits for Russian petroleum products were adopted at the last moment. Will they hit Putin in the pocket?

There is a preliminary agreement of the ambassadors of the EU countries on the ceilings for Russian oil products. It was agreed that the limit on Russian diesel oil would be USD 100 per barrel and USD 45 per barrel for heating oil.

She herself has been introducing an embargo on oil products since Sunday, February 5, but as part of the arrangements with the G7 group, she wants to introduce a global limit to further reduce the revenues to the Russian budget. The set ceiling is intended to limit Russia’s income from oil sales to third countries. Western companies will only be able to offer insurance and freight forwarding services if they respect price caps.

Price limits for Russian oil set. Poland will control the market prices of Russian products

Price ceilings for petroleum products will further reduce the Kremlin’s income, emphasized the Polish ambassador to the European Union, Andrzej Sadoś, in Brussels. He added that the postulate of Poland and the Baltic states regarding a mechanism adjusting price ceilings for Russian oil products to market fluctuations was taken into account.

Our goal is to strangle Russian revenues into the budget. The idea was to ensure that Poland would monitor the market prices of Russian products on a regular basis, every two months, and secondly, to set the maximum price at a level lower than the market price. This will be a big hit to Russian revenues

– said the Polish ambassador to the EU.

Russia loses hundreds of millions on embargoes and price caps

In early January, the Center for Research on Energy and Clean Air (CREA) reported that after imposing a price cap on Russian oil, this amount would increase to even USD 280 million when the embargo on imports of Russian oil in EU countries comes into force on February 5. Russia is already selling its own for less than half the market price.

The EU embargo and price cap has finally hit, and its impact is finally as significant as hoped

– says Lauri Myllyvirta, CREA analyst.

CREA pointed out in January that it should look at further restrictions on the price of Russian oil. Lowering the limit to $25-$35. per barrel would still be above Russia’s production and transportation costs and would result in a drop in revenues of at least another $100 million a day. Especially that wholesalers stock up on Russian fuels, thanks to which they “feed” the Russian budget.

which are repainted during the cruises. This strategy of circumventing the sanctions is so effective that although exports from Russia fell for the first two months after the introduction of the limits, today they have returned to pre-restriction levels.