Russian oil plummets to record low ahead of US sanctions against Rosneft and Lukoil

The price of Russia’s flagship oil last week fell to its lowest level in more than two and a half years — just days before US sanctions are set to hit the country’s two largest producers. This is reported by Bloomberg, writes UNN.

DetailsThe price of Urals crude dropped to $36.61 per barrel during shipment from the port of Novorossiysk in the Black Sea on Thursday — the lowest indicator since March 2023. A similar drop was observed in the Baltic Sea, according to Argus Media data. Both indicators rose slightly on Friday.

For Russian oil companies, such a drop will be a financial blow and will reduce the amount of taxes they pay to the Kremlin’s budget, which finances the war against Ukraine. Oil and gas provide about a quarter of the Russian state budget’s revenues

Demand for Russian oil cargoes plummeted after the administration of US President Donald Trump blacklisted Rosneft and Lukoil on October 22, increasing pressure on Russian dictator Vladimir Putin to end the war against Ukraine.

The deadline – November 21 – allows time to complete transactions with the two energy giants, but some refiners in China, India, and Turkey are already suspending purchases of Russian consignments and looking for alternative supplies

After the announcement of sanctions, Urals began trading at large discounts to international benchmarks.

Discounts on Urals from the two maritime regions deepened to an average of $23.52 per barrel relative to Brent at the end of last week — the widest gap since June 2023, according to Argus data.

This indicates that buyers are afraid to deal with Russian oil. The US has also warned of the possibility of secondary sanctions for those who do.

Even after delivery to China and India, Urals remains several dollars cheaper than Brent — and this is without taking into account transportation costs, Argus data shows.

India signs first long-term LNG supply deal with US17.11.25, 14:46 • 718 views