The European Union and the G7 introduced the measures necessary to prevent Russia from receiving oil revenues, which would then be used to wage war against the Kukriana. An embargo on crude oil imports and the imposition of a price cap on Russian oil products have all but wiped out Russia's main export commodity and market. Now the aggressor country sells oil to a limited number of countries — particularly China and India. Russian tankers are forced to travel thousands of miles to these countries, which is strongly reflected in the freight cost.
In order to compete with suppliers from the Middle East, Russia is forced to sell oil at a discount. This has resulted in prices for Russia's key commodity falling by more than a factor of 2, and even below the minimum price imposed by the G7.
According to Argus Media, on January 9, Russian Urals cost $37.80 per barrel, and Brent — $78.57.
It is not yet clear how Russia will react to the new circumstances. According to Bloomberg, there are 2 options: Russia will continue to work for these prices since it still needs funds to wage war against Ukraine. Or Kremlin will follow through on its threats and cut production.
