Russia offers discounts on oil imports, unfazed by EU embargo
Amid the price cap initiative, Europe meets its replacements from Asian and Middle Eastern countries in the Russian oil market as it remains adamant on the Brussels-backed sanctions on crude oil imports.
According to a Bloomberg report on Friday that cited analytics company Kpler, new markets are harboring potential buyers for half of Moscow's crude oil exports that are under Brussels’ looming embargo.
Major amounts of Russian crude imports are to be prohibited from entering the EU starting in December, while oil product exports will be banned beginning in February. This indicates, according to the International Energy Agency, that unless Russia reroutes its deliveries, approximately 2 million barrels of Russian oil a day will be left unclaimed.
However, this coming winter, countries including Indonesia, Pakistan, Brazil, South Africa, Sri Lanka, and a number from the Middle East could buy up to 1 million barrels of Russian crude a day. Exports to India and China have been elevated as a result of rejection from European buyers - as Russia boosts its sales by offering large discounts to attract buyers.
Analysts believe the tempting discounts may bring sales, alongside the Middle East's contribution as it can take as much as 500,000 barrels per day of Russian crude oil, and could even redirect the oil previously used domestically to export markets.
As a reaction to the embargo and price cap decisions, Russia asserted that it will stop exporting Russian oil to European states that are applying the decision, with Kremlin spokesman Dmitry Peskov telling journalists: "Of course, this can only be a retaliatory measure".
Per the account of earlier reports, a 30% discount rate has attracted Indonesia but is awaiting China and India's decision to agree on joining the price cap initiative pitched by the Group of Seven (G7) to curb Russia’s profits from oil exports. Russian President Vladimir Putin called the price capping "an absolutely stupid decision" at the Eastern Economic Forum in the Pacific port city of Vladivostok.
The price ceiling, which Western leaders agreed on in principle in June, would limit the number of money refiners and merchants could pay for Russian oil. The measure is intended to reduce the Kremlin's earnings while keeping Russian oil on the market in order to avert a price upsurge.