Russia expects its oil-exporting revenues to keep rising for the next three years, even as it faces Western price caps and embargoes, according to a government forecast submitted to Prime Minister Mikhail Mishustin that was seen by Bloomberg.
The forecast, which covers 2023 to 2026, puts the average price of crude at $62.70 a barrel – nearly $3 above the price cap set by the G7 at the end of 2022. As global crude oil prices have risen over the past month, Russia’s price for its crude oil has also risen, with some trading above the cap.
In 2025, it will rise to 67.90 dollars, and by 2026, the last year covered by the forecast, it will be almost 70 dollars a barrel.
The G7 has canceled plans to periodically review the price cap on Russian crude oil exports – and hasn’t done so since March – even though Russian crude is now trading above the price cap. The G7 set a price cap of $60 per barrel on Russian crude oil shipments to third countries outside the EU that use Western insurance and financing. This excludes India and China, which have taken a significant amount of Russian crude but have not deliberately adhered to the price cap.
Russia’s Urals oil averaged $74 a barrel in August, down from August 2022 but still well above the price cap of $60 a barrel, according to data released last week by the Russian Ministry of Finance. The average price for Urals between January and August this year was $56.48 per barrel – well below the G7 price cap. By comparison, Russia’s average price for January-August last year was $82.13 per barrel.