What can I say.. You are just making up numbers when ever it suits your agenda. No point arguing against your imagination. But still, lets post some real numbers - and remember the cap is $60..
Russia’s international reserves are back to over $600bn
- Thread starter beijingwalker
- Start date
beijingwalker
ELITE MEMBER
- Joined
- Nov 4, 2011
- Messages
- 65,195
- Reaction score
- -55
- Country
- Location
China And India Buy Russian Crude Above The Price Cap | OilPrice.com
China and India have been buying up Russian crude oil at prices above the $60 per barrel price cap set by the G7.
oilprice.com
Like I said, 70-80% of the tankers leaving Russia have insurrance in EU, G7 and Norway. The rest could transport oil traded above the cap. The average price the last 4 months was $50-$52. It is obvious the cap had an instant effect.China And India Buy Russian Crude Above The Price Cap | OilPrice.com
China and India have been buying up Russian crude oil at prices above the $60 per barrel price cap set by the G7.
Don't take the Urals Crude quote as gospel.
The real discounts are much lower than the implied ones.
The main reason why the Urals Crude Pricing "Data" is displaying so low is because it's not being used anymore as a pricing tool.
The real trades are done on a Brent or Dubai price with a discount added, but that discount is nowhere near the implied one from the Urals Crude Pricing "Data'.
This is the reason why Russia is switching taxes on exports from the erroneous Urals Crude Pricing "Data" to a simple discount on more accurate benchmarks.
That Urals Crude Pricing "Data" is showing what it is showing mostly due to the fact that manipulating the benchmark means that Russian oil companies get to evade a huge portion of the tax burden.
The reason why the "insurance sanction scheme" isn't actually working is due to the fact that the Europeans don't actually want it to work.
Tanker companies can simply pretend that the oil or product is from Kazakhstan or some other Eastern European country.
Theoretically the sanctions on Russian oil exports as written shouldn't be that hard to enforce.
The reason it's not being enforced all that stringently is due mostly to the Europeans not wanting to have to pay a huge premium.
The way you will see if the sanctions are enforced is if the European price for crude has a far higher premium than it did before the sanctions.
Currently the European price for crude does not display a meaningful increase in premium over the price pre-sanction premium, so one can infer that the sanctions are mostly cosmetic.
Last edited:
I don't think you understand.
Russian Urals Barrels no longer use the Bloomberg Urals Crude Quote as the pricing mechanism for selling Urals crude.
The Bloomberg Urals Crude Quote (which is the only Urals Crude Quote), is what the Russian Government used to set oil taxes at before recently, but it is gathered by asking traders.
The traders no longer have a market incentive to tell Bloomberg the real Urals Crude price for them to produce the Urals Crude Quote.
Essentially, both sides get what they want.
The Europeans can pretend that their price cap is working, while the Russian Oil Companies can also pretend that the European oil price cap is working, and thereby pay less in taxes on the real price they are selling their Urals crude at.
This does not mean that the real price that Urals Crude is being traded at is the price that the Bloomberg Urals Crude quote shows.
This is classic market price signal destruction.
The price cap in reality has made the real Urals Crude price being traded at a secret price.
The Bloomberg Urals Crude quote hasn't been anywhere close to accurate ever since the sanctions started in February 2022.
The stigma from trading Russian Urals Crude started in February 2022.
This caused the traders of Urals crude to not actually have an incentive to report the real price of Urals crude to Bloomberg even back then.
The real discount was never as high as the quote showed.
The quote simply became even less real after the price cap.
The Urals crude discount is currently higher than the ESPO discount, but unknown how high the discount is, but it's not higher than 10 dollars in reality.
The only way to calculate how high the Urals crude price really is is to get Russia's 2023 oil tax revenue after they implement the change to Brent and Dubai plus discount as the tax price mechanism from the current Bloomberg Urals Crude Quote as the tax price mechanism.
This is assuming that they don't make that data secret from now on to discourage further sanctions.
Last edited:
Found a Carnegie article explaining it. Revenues transferred to offshore wings evading taxes in Russia.
And from March 2023 the Russian government plans to ditch the Urals quoted price from oil tax calculations and use Brent with a fixed discount instead.
The obstacles put in the way of Russia’s main exports reaching Europe meant that transparency vanished not only for Western watchers of the Russian economy, but for the Russian government too, which was quite possibly too preoccupied to see that the tale of the suppressed Urals price was quite complicated, and only explained part of the Russo-European oil trade. But one way or another, the Russian state budget was deprived of a substantial share of oil revenue.
Last edited:
Pretending that the Russian government cannot claw back the missing taxes retroactively during a war is wishful thinking.
The spin out of Washington and Brussels about the Russian Urals exports as tiring to talk about, as it's entirely bad faith in every facet of it in terms of the arguments being made.
I only care about the actual prices, as the real Urals Crude Price discount is important for my predictions about the energy market.
Similar threads
