Mar 3, 2023

Today’s price updates for Urals and Brent Crude are sending strong signals that the EU/G7 price cap on Urals crude is, as I speculated earlier, crumbling.

Is the Russia Price Cap Starting To Fail?

At the end of January, I posed the question “Will The Oil Cap Hold?” It is beyond any and all doubt that the price cap has curtailed Russia’s oil revenues over the past two months, prompting a belated pushback from Vladimir Putin in the form of a threat to curtail oil production if the cap is sustained…

a year ago · 2 likes · Peter Nayland Kust

After a brief retreat below $60/bbl, Urals moved sharply higher, closing at $61.32/bbl per Trading Economics.

This is not a movement reflected in the prices for either Brent crude or West Texas Intermediate.

With the ESPO contract already trading above $60/bbl, the market is undeniably signalling that the price cap on Russian oil is failing, and that Russian oil is beginning to price independent of the global oil market in general.

1 Comment

Stevanovitch

Mar 3, 2023

Excellent.

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The Russia Price Cap Is Failing