Russian oil has ceilinged itself on the markets

According to data from trading company Argus Media, the price of Russian Urals oil fell to $52 (CZK 1,220) per barrel on Thursday. For comparison, a barrel of Brent North Sea oil was sold for 85 dollars (1990 CZK) on the same day.

Russian oil has been at a discount against Brent for a long time, which was especially used by China and India, who started buying Urals in much larger volumes than before the war in Ukraine. However, these countries temporarily suspended purchases for imports in December, as they are waiting to see what the price ceiling agreed upon by the European Union, the G7 countries and Australia will look like.

The ceiling will guarantee that traders who buy Russian oil above its limit will lose access to European and especially Greek oil tankers or industrial risk insurance (oil spills, etc.).

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However, the ceiling height itself is a long-discussed and still unresolved point. EU representatives are talking about a level between 65 and 70 dollars. For example, Poland considers the price of $65 insufficient, while Greece, which is the largest owner of oil tankers in the world, does not want to go below $70.

Either way, if the cap was indeed implemented somewhere between the discussed threshold, it would still mean that Russian traders would collect more money for oil than they do now.

Valid from December 5th

The G7 countries and Australia agreed to cap Russian oil imported by sea already at the beginning of September, the European Union a month later. The measure will enter into force on December 5. On the same day, the ban on the import of Russian oil into the EU will also come into effect, and on February 5, the ban on the import of Russian oil products will also be added.

However, several countries have negotiated exemptions from the ban. For example, the transportation of crude oil via the Družba pipeline supplying the Czechia, Slovakia and Hungary will be temporarily excluded from the embargo. Unlike other countries, the Czechia will also be able to import Russian oil products from refineries in other EU countries until December next year.

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