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Petroleum products have their ceiling determined

27 January 2023

Kondratiev Sergey V. Deputy Head of the Economic Department, Head of the Real Sector Group

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, gave a comment to Kommersant FM about the "price ceiling" for petroleum products.

Sergey Kondratiev estimates losses at 10-15%. In his opinion, it will not be easy to find new markets, but it is real:

"The EU countries, of course, will be forced to seriously increase imports from North America, the Middle East, and India in order to cover the deficit formed after the cessation of petroleum products supplies from Russia. There will also be a shortage in Asia and Africa, because the flows will simply be reinvested in Europe. So Russian oil products can potentially find their market, although, of course, this is a more difficult task than in the case of oil supplies. Here we will have to enter a significantly larger number of markets with different technical requirements, with different requirements for financing such transactions.

The reorientation may take several months, maybe even several quarters, and it is quite possible that we will lose some export volumes at the same time.

Meanwhile, restrictions can lead to revenue being 10% lower, maybe 15%. By itself, the price ceiling in the parameters in which it is discussed can be bypassed, especially in the case of diesel fuel. Over the past year, we have repeatedly observed that there was a shortage of it in many regional markets. I think that in this case, many consumers in Asia will be ready to buy it above such a limit."

Kondratiev Sergey V. Deputy Head of the Economic Department, Head of the Real Sector Group
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