The Kremlin is paying approximately £140m per day for the price cap on Russian oil that was imposed by the G7 group.
According to a report by the Centre for Research on Energy and Clean Air, Russia’s fossil fuel export earnings fell 17% in December to their lowest level since Ukraine’s invasion.
When the EU’s bans on refined oil imports and the extension of the price caps on refined oil, as well as reductions in oil imports from Poland to the EU, come into effect on February 5, the cost to Vladimir Putin’s government will increase to approximately £246m per day.
Last week, the biggest importers of Russian fossil fuels were China, India and Turkey.
According to the Research on Energy and Clean Air report, crude oil shipments from Russia seem to have bottomed after falling in the weeks following the introduction of the price cap and the EU’s import ban.
Russia still makes an estimated £565m per year from fossil fuel exports, down from the high of £883m between March and May 2022.
G7 oil price caps have led to a 12pc decline in Russian crude oil exports, and a 23pc decrease in sales prices.
According to the Centre for Research on Energy and Clean Air, this has led to a 32% drop in Russian crude oil revenue in December.
They fell another 5% due to Germany’s termination of its pipeline oil imports at the end of December.
Russia has so far earned approximately £2.7bn by transporting crude oil on vessels that are subject to the price caps, which amounts to about £1.8bn tax revenue for Moscow.
The Centre for Research on Energy and Clean Air stated that this could be nearly eliminated by lowering the marginal price to a level closer to the cost for Russia-producing oil.
It stated that the price cap coalition has strong leverage to lower the price limit and added that Russia has not yet found an alternative to the vessels owned/or insured by G7 nations to transport Russian oil products from the Black Sea and Baltic ports.
