RE: Share is stagnant25 Nov 2022 18:30
The OIlPrice Russia crude selling at $52 link below illustrates the current futility of setting an oil price cap at $65/$70
But re the good Bloomberg article posted early, maintaining production levels is only half the story. Why. On the face of it, with Russia production costs at circa $20, selling even at $52 seems a good deal? No! Why? Russia, broadly same as Saudi, pre-war needed $60-$70 to balance the national budget - crucial for both countries where bulk of national income is from oil/gas. Since much of the remainder of Russia'a economy profit has been severely curtailed (1000 foreign firms exiting, + crucial imports sanctioned), and Russia is spending much of national (oil/gas) income on it's war effort, even if Russia production level was maintained (it won't be), the price it needs to sell at to balance it's economy will have risen from last years $60-$70. The fundamental point being that sanctions ARE IMPACTING - by slowly strangling the well above $60-$70 a barrel sale price Russia now needs to balance it's budget (in lay terms to pay it's monthly national bills)., Also, sanctions always follow the same effect trajectory (i) countries impose them (ii) sanctioned country finds loopholes to evade (iii) sanctioning countries close loopholes. (iv) cycle continues, but always ever-tightening. Sanctions are slowly crippling Russia economically, And over time it's limited ability to find new oil/gas markets to offset sanctions, and the EU increasingly weaning itself off Russia oil/gas dependency, will impact more heavily
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