The Center for Research on Energy and Clean Air (CREA) has published an analysis regarding the potential impact of the European Commission’s new initiative, which proposes lowering the maximum price for Russian oil from the current $60 to $45 per barrel as part of the 18th sanctions package against the Russian Federation.
This is reported by Finway
Russia’s Losses from the Price Cap Reduction
According to CREA, if the new price cap is strictly and fully enforced, Russia’s oil export revenues would decrease by 27% for the month of May alone, which is equivalent to €2.8 billion. However, experts emphasize that these calculations assume strict adherence to the established cap, which in real conditions requires effective monitoring and coordination among all market participants.
Since the imposition of sanctions in December 2022, full compliance with the price cap would have reduced Russia’s export revenues by 11% (€39.01 billion) by the end of May 2025.
Additional Scenarios for Price Restrictions
By May 2025, under full compliance with the current price cap, the losses to the Russian budget from oil exports could amount to an additional 4%, or about €0.47 billion. If a stricter cap of $30 per barrel were established, which still significantly exceeds the cost of oil production in Russia, the country’s oil export revenues could fall by 40% (€142 billion) from the time the EU sanctions were introduced until the end of May 2025. Under such conditions, losses in May alone would reach 36% (€3.8 billion).
Thus, analysts emphasize the significant potential of lowering the price cap to substantially reduce the Russian Federation’s export revenues and enhance the effectiveness of the sanctions policy.