Russian Oil Average Price Was 57

Russian Oil Average Price Was 57 by Ashly Chole last updated on January 14, 2023

Russian Oil's Average Price Was $57.49/barrel Last Month

If we look at the average price of Russian oil between 15th November - 14th December, it was around $57.49. On the other hand, the western allies have set a price cap of $60 on Russian oil. This means that the trading price for Russia's Urals oil was already below the western price cap.

According to experts, the insurers and the shippers from the Western countries can still continue to provide services to the Russian oil sector. The only way they would get sanctioned is if they handle Russian oil that's priced higher than the price cap. So in that sense, everything is fine for the Russian oil industry and the relevant players for now.

Downtrend In Global Oil Markets

But what's the reason for this drop in Russian oil? Just last month, Russian oil was trading around $71.10, which is way higher than its current prices. According to experts, this has nothing to do with the price cap and is more about a drop in the global oil markets.

However, Moscow has made it clear that the western price cap scheme is illegal, and it could cut the oil output to counter it.

According to the guidance issued by US Treasury, the price cap doesn't include additional costs such as shipping or insurance. The price cap is only for the buyers who will be loading oil directly from the Russian oil terminal.

Additional data suggests that the price for delivering Russian oil from the Black sea port is around $48.69 on a FOB basis. If we look on a CIF basis, the actual cost is around $57.28 per barrel.

The sources inside the oil market have revealed that Russian oil is being sold at a heavily discounted price after the EU ban on all oil imports from Russia.

But Russia has also found other buyers of its oil after losing access to various EU countries who were once buyers of its energy-related products.