EU reached an embargo agreement on Russia at the end of May this year. announced that from December 5, EU member states will ban the import of Russian crude oil from the sea, and prohibit related companies from providing insurance and financing for Russian oil anywhere in the world.
Now, this embargo agreement has officially come into effect for a week. Has the Russian oil market been affected by this agreement? Have international oil prices risen sharply due to this agreement? Let's take a look at the opinions of a Bloomberg column.
Although the market has been concerned, including the US government, it also believes that EU sanctions on Russian maritime crude oil may cause prices to soar . But now it seems that there is no need to worry, at least not too much for the time being.
The last batch of Russian crude oil has been shipped to ports in Europe, and Moscow has lost a market at the doorstep of more than 1.5 million barrels a day. If Polish and Germany stop to fulfill its promise of pipeline imports , Russia looks to lose another 500,000 barrels per day sales by the end of this year.
However, oil prices did not soar, but instead fell. On the fifth day after the embargo agreement began, the benchmark Brent crude oil trading price was below $77 per barrel and briefly fell below $76 per barrel, which has fallen by more than 14% compared with the turbulent price high on Monday after the agreement took effect.
Russian crude oil has lost its European market, and its Baltic port is still important, which also shows that Kremlin does not have the ability to redirect the oil flow and send supplies to Russia's last remaining market in China, India and Turkey is to detour Europe and long-distance voyages through Suez Canal .
This article analyzes the view that Europe's embargo on Russian oil has even caused an oversupply in some local areas. After "long-distance travel", Russian oil still needs to compete with suppliers from Middle East , so the price must be lowered to offset the high cost of this part of long-distance transportation.
On the other hand, the European economy has suffered a severe blow since Russia launched its special military operation, triggering various inflation, including food and energy . But analysts believe that the world economy can easily cope with the lack of Russian crude oil, at least it seems so now.
Based on these reasons, the export price of Russian crude oil has dropped further recently. , its main export grade Ural oil, was sold at a price slightly higher than US$40 per barrel, which is already the cost price of its crude oil production , and this price is now far lower than the price limit set in the EU import ban.
The Kremlin is facing a "huge blow" from crude oil export tax revenue next month, and may set a record low of since the epidemic cuts revenue in early 2020 .
From the analysis point of view of the article, it can be seen that the United States and Western countries agree that the world has been able to deal with the transfer of Russian crude oil from Europe to Asia, and the "cost" they expect is falling on the Kremlin.
But is this really the case? It's only one week, and there may be more "surprises" in in the future waiting for Europe where the economy is accelerating its recession. I wonder if they will still feel as comfortable as they are now at that time?
And Russia has already had its own rich "resistance" plan in the face of such sanctions from the EU. Putin President has also spoken: reduce oil production and deal with the current oil price restrictions, while not exporting any Russian oil to these countries.
[Yeah listen to me]
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