Moscow, Russia (TEH) – In a surprising turn of events, Russian oil has defied Western sanctions and embargoes, with revenues rising to an eight-month high. The Western alliance, including the United States and the European Union, had imposed restrictions to limit the flow of petrodollars to Moscow in response to events in Ukraine. Simultaneously, they aimed to maintain the flow of Russian oil to world markets. However, the global oil market has proven resistant to manipulation by the West, as reported by Bloomberg.
According to the International Energy Agency (IEA), Russian oil has exceeded the price ceiling set by the G7 countries, and oil export revenues have surged to an eight-month high. The price of offshore supplies jumped to $64.41 a barrel on a weighted average last month, surpassing the $60 price cap set last year by the G7, as per the IEA’s latest monthly report.
This rise in Russia’s oil revenues demonstrates how Moscow and its allies have successfully restructured the market to partially evade restrictions and lock in commodity prices by transporting them outside the cap.
In July, Russia earned $15.3 billion from its oil and fuel exports, an increase of almost 20% from the previous month. Such transformations occurred as the price of raw materials increased globally. Even Moscow, which has been reducing production, remained profitable.
Oil production in Russia in July was approximately 9.4 million barrels per day, about 50,000 barrels per day less than in June. The IEA forecasts oil production in Russia this year at 10.86 million barrels per day on average, 230,000 barrels per day less than in 2022.
Crude oil exports fell by 200,000 barrels a day to 4.6 million. Notably, China and India accounted for about 80% of all Russian supplies.
The situation highlights the complexity and resilience of the global oil market. Despite concerted efforts by Western powers to curb Russian influence and revenue through oil, the market dynamics have allowed Russia to adapt and even thrive. The implications of this development are far-reaching, affecting not only international relations but also global economic stability.
