Once new European Union restrictions on Russian oil products come into effect on February 5, Russia could face losses of around $300 million a day, a new report from a Finnish research center predicts.
The report by the independent Helsinki-based Energy and Clean Air Research Center (CREA) found on Wednesday that the existing EU ban on crude oil imports from Russia, coupled with the oil price cap, is costing the Kremlin coffers around $172 million a day.
CREA notes that Russia’s fossil fuel export earnings fell 17% in December, the lowest since the invasion of Ukraine early last year.
“The drop in Russian oil supplies and prices has cut the country’s export earnings by 180 million euros a day. Russia managed to reclaim 20 million euros a day by increasing exports of refined oil products to the EU and the rest of the world, resulting in a daily net loss of 160 million euros,” the report said.
In addition, the report notes that not only has this resulted in a 12% drop in Russian crude oil exports, but also a 23% drop in sales prices, with crude oil revenues falling by a total of 32% in December.
Nonetheless, CREA notes that Russia “still earns an estimated EUR 640 million per day from fossil fuel exports, down from a peak of EUR 1000 million in March-May 2022”.
“The EU ban on refined oil imports, the extension of the refined oil price cap and the reduction in pipeline oil imports to Poland will reduce this by an estimated €120 million per day by February 5.”
The European Union ban on the purchase, import or sea transport of Russian crude oil, which came into effect on December 5, will be extended to other refined petroleum products from February 5. In addition, under the G7 price caps, Russian oil is capped at a selling price of $60 per barrel.
By Charles Kennedy for Oilprice.com
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