Oil embargo, price cap: Russia's losses may reach $125B a year — Klimkin

According to various estimates, Russia's losses due to the introduction of embargoes and oil price caps will reach $75 billion to $125 billion per year.

Former Ukrainian Foreign Minister Pavlo Klimkin said this in a post on Facebook, Ukrinform reports.

"For the Kremlin, there is already a real and tangible threat of macroeconomic destabilization. I have seen various estimates of the losses of the Russian regime depending on the fluctuations in oil prices: from 75 to 125 billion dollars per year. And it's very cool. The main result is that Moscow is forced to play in view of the 'red flags' set by the West. Russia remains a supplier, but ceases to be a player," Klimkin said.

According to him, Russian budget expenditures in January 2023 increased by two-thirds compared to last year, and this is also an indicator of how much the war is costing Russia. At the same time, Russian budget revenues shrank by almost three times.

"This trend has been going on for the second month and is directly related to the embargo on Russian oil and a price cap on it. Civilized countries no longer buy Russian oil or petroleum products, and restrictions are in place for all others," Klimkin said.

He added that the average size of a discount on Russian oil remains at the level of 40% and does not decrease, despite all efforts by Russia to circumvent the bans. With oil products, according to Klimkin, it will be even more difficult to circumvent the restrictions, because they are not transported by supertankers.

In addition, Russia failed to "freeze" Europe and Ukraine. In the EU, the level of gas reserves in storage facilities at the beginning of February is 76%, while last year it was 41%.