Western sanctions on Russia's booming oil industry may be falling, it turns out

The West has sought to clamp down on Russia's oil sector through crippling sanctions in response to the country's invasion of Ukraine, but new data indicate a key goal of the sanctions is not being achieved, Bloomberg News reported Monday.

The price of deliveries of Russian Urals crude from a major Black Sea port to Asian buyers fell to its lowest level since October 2023, while notional delivery costs, a metric which specifically isolates the impacts of sanctions, have also declined. seconds to Bloomberg, which cites market research from a company called Argus Media. The price drops allow Russian companies to keep a larger share of revenue earned from sales to buyers in China and India, and signal that a key target of the West's massive production penalties Package addressed to Russia (increased delivery costs) is not being fulfilled.

Russia is expected to earn $9.4 billion in oil and gas revenue in June alone, up 50% from the same period in 2023, Reuters reported.

It currently costs about $7.2 billion to deliver one million barrels of Russian Urals crude to northern China via the Black Sea port of Novorossiysk, according to Bloomberg. In early April, the same delivery would cost $10.4 million.

An endless wave of US-led sanctions could be the greatest gift China has ever received https://t.co/Xlas3jSE7h

— Daily Caller (@DailyCaller) June 3, 2024

The portion of those costs believed to be directly attributable to Western sanctions has also declined, to about $2.8 billion, from about $6.8 billion in April, according to Bloomberg . Also, the price premium per barrel for oil shipped from the Baltic Sea to India has fallen by around 45%, currently standing at $4 after reaching $7.40 in April .

The current cost of a barrel of Russian crude is around $75, well above the peak price of $60 imposed in response to the Russian invasion of Ukraine, according to Bloomberg. In some cases, prices are even higher once the product reaches India and China, two markets that have become big buyers of Russian oil after the US and its European allies imposed new sanctions.

Although the Biden administration has consistently touted Russian sanctions as effective and deserved punishment in response to Russian President Vladimir Putin's war in Ukraine. some observers have pointed out that the sanctions have not been as effective as advertised.

Moreover, the administration appears to have made exceptions to its strong stance against Russia in order to advance its domestic political interests.

For example, some sanctions against the Russian energy sector have not been fully enforced because of the administration concerns about potential disruptions to the global oil market as the 2024 election approaches. Biden officials have also reported he urged Ukrainian forces refrain from attacking Russian oil refineries because such attacks could drive up oil prices.

The State Department did not immediately respond to a request for comment.

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