Break the G7 limit! Russia’s oil prices to Asia exceed limit

Price caps on Russian seaborne crude oil exports from the G7, the European Union and Australia came into effect on Monday. And recent news shows that at least in Asia, where some of its major customers are located, Russia has broken through Western price limits. On Thursday, the media estimated that the export price of the above-mentioned Russian ESPO crude oil to Asian refiners was US$67.11/barrel, nearly 12% higher than the G7 price ceiling of US$60/barrel, based on the data Russia used to calculate export tariffs. At present, the G7—the United States, Canada, the United Kingdom, France, Germany, Italy, Japan, and other EU countries and Australia—is implementing price caps, and it does not involve many developing countries, especially the major oil consuming countries in Asia. | Related Reading (Wall Street Insights)

Sanli Xunyan

Europe’s price limit order for Russian oil can be described as “killing two birds with one stone”. It can not only reduce Russia’s crude oil revenue, but also not delay its own crude oil supply. Compared with directly prohibiting the purchase of Russian oil, it is a compromise.

Among the top ten countries for Russia’s crude oil exports in 2021, the Netherlands, Germany, Poland, Italy, Finland and other European countries are all listed, accounting for nearly half of Russia’s oil exports, so it will still have a great impact.

China is the largest importer of Russian oil, accounting for nearly 30% of that year. South Korea is also among Russia’s top ten export markets, so the so-called Asian buyers are probably these two.

According to the statistics of shipping and tanker tracking organizations MarineTraffic and TankerTracker on December 7, since the sanctions on Russian oil prices came into force on December 5, in just 48 hours, the export volume of Russian seaborne oil has been reduced by half.

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