"It's a fiction": on limiting prices for Russian oil

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, gave an interview to Rambler.Finance on the introduction of “marginal” prices for Russian oil.

“A possible range of marginal prices of $40-60 has been voiced by experts for a long time, back in early summer. We proceeded from the logic that $40 is approximately the lower cost price, taking into account all the duties for the transportation of Russian oil, and $60 is already more or less acceptable in relation to a higher margin. Moreover, $60 per barrel is close to the level at which budget revenues are now oriented, including in the new draft budget.

At the same time, the average price of Urals this year is about $80 due to the discounts that Russian companies are forced to provide to buyers, especially Asian ones. This is much lower than the price of Brent, which is over $100. But still, $80 per barrel of Urals is a much higher level than $60. Therefore, there is nothing unexpected in Yellen's proposal; in the United States, responsible officials initially hinted and said that the upper bar would be chosen within the range of $40-60 per barrel . But the main issue is that neither the United States nor the European Union have the economic capacity to manage the oil market, manage pricing. Such opportunities existed in the 1960s, before the first oil crisis in 1973. But since then, a lot of water has flowed under the bridge, and now the Western countries do not have such leverage.”