OREANDA-NEWS Since the beginning of the year, Russia has significantly increased discounts on oil supplies to India in order to maintain demand in the face of US sanctions. The Financial Times writes about this with reference to sources.

As a result, excluding transportation costs, some shipments are already being sold for $22-25 per barrel, which barely covers the cost of production. If we exclude the period of the COVID-19 pandemic, the last time Russia sold oil so cheaply was in 2003.

According to the source, if the United States further tightens sanctions, pipeline shipments will remain the only way to sell Russian oil.

In December, as reported by the Ministry of Economic Development, the price of the main Russian export grade of Urals oil, used to calculate the mineral extraction tax (MET), fell to $ 39.18 per barrel. This is more than five dollars lower than in November.

At the same time, even the current discounts do not allow us to maintain the volume of exports to India, which is increasingly diversifying its sources of supply. A new blow to Russian supplies to India has been the European ban on the import of petroleum products made from Russian oil.

Against this background, Russian companies have increased supplies to China, but even there, shipments of Russian raw materials are trading at an unprecedented low level. If in August Urals was sold at a premium of one dollar to Brent, then last week the discount reached ten dollars per barrel.