Russia is losing 160 million Euros daily due to Western sanctions on its oil exports
A new report indicated that Russia, the largest oil exporter in the world, loses about 160 million Euros per day due to the long-term oil embargo imposed by the European Union on Russian oil and the price limit set by the Group of Seven.
The size of these losses may rise to 280 million Euros per day after the fifth of February, which is the deadline imposed by Brussels on the 27 countries of the bloc, to phase out all seaborne imports of refined petroleum products.
Russia currently secures 640 million Euros per day for its coffers from the sale of its oil derivatives, down from 1,000 million euros in March 2022.
It’s believed that fossil energy constitutes about 40% of Moscow’s federal budget and contributes heavily to financing the war on Ukraine.
The Center for Energy and Cleanliness Research (CREA), which is an independent research organization based in the Finish capital, Helsinki, said on its report that blocks opposition voices in the Western world, who previously claimed that Western sanctions imposed on Russia don’t affect its budget, but rather benefit Moscow due to high energy prices.
“The impact of the European Union’s embargo on Russian oil and the cap on its prices is as great as expected,” said Lauri Milvirta, senior analyst at the Center, in a press release.
A spokeswoman for the European Commission refused to comment on the report, saying only: “The figures that appear in the report speak for themselves”.
However, the Kremlin saw that it was too early to draw conclusions and comment on the economic losses.
“As for the losses, no one has seen their scale yet,” The Kremlin spokesman Dmitry Peskov said.
The G7 countries, which include Canada, France, Germany, Italy, Japan, the United States and Britain, decided to set a limit for the price of a barrel of Russian crude of $60, a ceiling that didn’t satisfy countries in Eastern Europe, most notably Poland, as well as the Ukrainian side.
Nevertheless, the price of Urals crude continued to decline at the beginning of 2023, recording $51 per barrel, a sharp decrease from the period before the Russian invasion of Ukraine last year, when its price reached $95.
Experts at the Energy and Cleanliness Research Center believe that setting a new limit for Russian oil ranging between $25 and $35 a barrel could increase daily Russian losses by about 100 million Euros, in addition to the current losses.