{"id":13311,"date":"2022-12-06T08:10:19","date_gmt":"2022-12-06T06:10:19","guid":{"rendered":"https:\/\/stage.kse.ua\/news\/russian-chartbook-december-2022-oil-embargo-and-price-cap\/"},"modified":"2026-09-08T13:34:42","modified_gmt":"2026-09-08T13:34:42","slug":"russian-chartbook-december-2022-oil-embargo-and-price-cap","status":"publish","type":"news","link":"https:\/\/kse.ua\/en\/news\/russian-chartbook-december-2022-oil-embargo-and-price-cap\/","title":{"rendered":"Russian Chartbook December 2022: Oil Embargo and Price Cap"},"content":{"rendered":"<p>European oil embargo and G7 and EU oil price cap: Today, the EU embargo on seaborne crude oil imports from Russia comes into effect, as does the price cap on all Russian oil sales which use services from companies based on the G7, EU and Australia. We see this as a key step, which lower Russian oil exports and revenue earnings. However, to be fully effective, we have proposed a lower oil price cap \u2014 at $35\/bbl rather than $60\/bbl \u2013 which would still be significantly higher than Russia\u2019s production costs, and so maintain Russia\u2019s incentive to supply, but would cut Russia\u2019s export earnings to a level which would constrain Russia\u2019s ability to wage war on Ukraine.\u00a0<\/p>\n<p>Russian contraction set to deepen: The initial wave of sanctions hit the Russian economy hard in spring, driving the CBR to hike rates to 20% and introduce capital controls. But then high oil and gas revenues and the collapse of imports drove record inflows which stabilized the economy, driving the RUB higher, reducing inflation and allowing the CBR to reverse its rate hikes. Even so, Russia is still heading for a substantial contraction this year &#8211; albeit revised up to -3-3.5%, according to recent CBR and IMF forecasts. But looking ahead, we expect contraction to deepen. This partly reflects the impact of Russia\u2019s September mobilization, which appears to have driven a major liquidation of household financial assets. More importantly, it reflects the looming collapse in oil and gas revenues \u2014 which account for over 60% of exports and over 40% of budget revenues \u2014 thanks to the European oil embargo, the G7 oil price cap, and the collapse in Russian gas sales to Europe. Subject to robust implementation of the price cap, we forecast Russian oil and gas revenues will fall below the critical point \u2013 around $150 bn per annum \u2014 next year. At this point, as in previous episodes of weak oil prices, we expect Russia\u2019s underlying financial fragilities in the currency and at banks to resurface, constraining Russia\u2019s ability to continue financing the war.\u00a0\u00a0<\/p>\n<p>More information on the Russian economy and forecasts about the impact of the new restrictions can be found in the December <a href=\"https:\/\/kse-ua-prod-media.fra1.digitaloceanspaces.com\/wp-content\/uploads\/2022\/12\/08115800\/chart-book_issue-2_dec5.pdf\">Chartbook<\/a> by KSE Institute.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>European oil embargo and G7 and EU oil price cap: Today, the EU embargo on seaborne crude oil imports from Russia comes into effect, as does the price cap on all Russian oil sales which use services from companies based on the G7, EU and Australia. We see this as a key step, which lower\u2026<\/p>\n","protected":false},"featured_media":0,"template":"","categories":[251],"tags":[254],"department":[],"news_type":[230],"project":[],"region":[108],"unit":[223],"class_list":["post-13311","news","type-news","status-publish","hentry","category-sanctions-en","tag-sanctions-en","news_type-analytical-product","region-russia","unit-institute-en"],"acf":{"primary_unit":223,"news_intro":"","header_cta_mode":"event","header_event_cta_text":"\u0414\u043e \u043f\u043e\u0434\u0456\u0457","header_event_cta_url":"","header_research_cta_text":"\u0427\u0438\u0442\u0430\u0442\u0438 \u0432\u0441\u0435 \u0434\u043e\u0441\u043b\u0456\u0434\u0436\u0435\u043d\u043d\u044f","header_research_pdf":null,"author_person":"","author_name":"","related_news":null,"related_events":[],"related_people":[],"related_links":null,"external_link":"","external_link_label":"","is_featured":false,"is_featured_archive":false,"quote_text":"","quote_author":"","quote_author_role":"","program_title":"\u0424\u043e\u0440\u043c\u0430\u0442 \u043f\u0440\u043e\u0433\u0440\u0430\u043c\u0438","program_items":null,"reference_title":"\u0414\u043e\u0432\u0456\u0434\u043a\u0430","reference_content":"","source_system":"migration","source_id":"49759","content_owner":"kse","last_reviewed":null,"visibility":"public","platform_id":"","platform_version":"","platform_managed":false},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.5 (Yoast SEO v28.6) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Russian Chartbook December 2022: Oil Embargo and Price Cap - KSE<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kse.ua\/en\/news\/russian-chartbook-december-2022-oil-embargo-and-price-cap\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Russian Chartbook December 2022: Oil Embargo and Price Cap\" \/>\n<meta property=\"og:description\" content=\"European oil embargo and G7 and EU oil price cap: Today, the EU embargo on seaborne crude oil imports from Russia comes into effect, as does the price cap on all Russian oil sales which use services from companies based on the G7, EU and Australia. 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