Factories that have abandoned Russian oil have lost profit

Factories that, due to sanctions, cannot buy Russian oil have practically ceased to receive profit from the processing of Middle Eastern oil , Bloomberg reported.

We are talking about plants "in some parts of Asia", and some of these plants are considering reducing production against the backdrop of the current situation. Speaking to Bloomberg, representatives of a number of oil refineries in Asia and Europe that cannot buy oil from RUSSIA, on condition of anonymity, noted that sanctions against Moscow limit their options.

At the same time, for refineries in India and CHINA, which continue to buy oil at a discount from Russia and other sanctioned countries such as Iran and Venezuela , the situation is diametrically opposite, Bloomberg notes.

According to the agency, such a “separation” means that sanctions against Russian oil were “not painless” for the economies of the industrialized countries themselves. Those plants that can buy Russian oil then legally sell it to the same G7 countries after processing it into fuels such as diesel and gasoline, Bloomberg notes.

“We will continue to see winners and losers as long as Russian oil is discounted,” said Youssef Alshammari, CEO and HEAD of oil research at CMarkits in London . “There is a clear economic advantage when this discounted oil is refined and sold as a product in international markets,” he added.

The European Union and the G7 countries introduced a price ceiling for Russian oil in December, and in February the restriction was extended to oil products. The Russian authorities consider the sanctions illegal. As a retaliatory measure, Russia banned the supply of oil to countries that set a price ceiling and refocused on the Asian market. In March, China and India accounted for up to 91% of such exports, according to estimates by the analytical company Vortexa .

In Asia, the Russian grade of Urals oil began to be sold at large discounts, up to a price below cost, REUTERS reported in December . In particular, the discount on Russian raw materials in India that month amounted to $12-15 compared to earlier deals.

The United States considered the situation when Russian oil and oil products are sold below the marginal prices as positive and noted that the price ceiling "works well." As Bloomberg reported, the majority of the G7 members oppose lowering the price ceiling, Brussels also considers the current ceiling to be effective.