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Russia

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The head independent producer Russneft has suggested that Russia could continue to export oil profitably under the G7 nations' plan to impose a price cap on overseas sales of Russian oil — as long as certain conditions are met. Russneft CEO Yevgeny Tolochek said the scheme could work for Russian producers if the value of the dollar was strong relative to the ruble and if the cap was set around $69/bbl. Tolochek said the price cap proposal "indirectly proves that the market won't be able to do without Russian oil." Russneft produces around 140,000 b/d, or slightly more than 1% of Russia's total production of crude oil and condensate. Tolochek said Russneft's 2022 budget is based on a price of $65/bbl for Russia's Urals crude oil export blend. The company's budget calculations for 2023 are likely to be set around $69/bbl. "If the price cap is set at about this level, exports would remain efficient, also under a high exchange rate of the US dollar," he said. Tolochek said Russian producers would need an exchange rate of around 80 rubles to the dollar. The current rate is less than 60 rubles per dollar.

Topics:
Oil Supply, Sanctions
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