Russia to Slash Oil Exports to Curb Rising Domestic Fuel Prices

The world’s second-biggest oil exporter, Russia, is planning to cut overseas shipments of its seaborne crude from the country’s western ports next month, to curb a record surge in domestic fuel prices, RT reported.

The exports of Urals crude from Russia’s western ports will be slashed by up to 20 percent in February, Bloomberg reports, citing the loading program. Russia will reportedly ship around 1.13 million barrels of oil per day (bpd) against 1.38 million bpd recorded in January.

Sources close to the matter told the media that the crude would be diverted into refineries in Russia to raise domestic supplies, as the country attempts to gain control over fuel prices, which surged to the highest level, in ruble terms, in 13 years.

According to the data tracked by the Federal Statistical Service, Russia’s average retail price of gasoline saw a year-on-year surge of 2.6 percent as of December 28. Last week, it topped 47.31 rubles ($0.62) per liter, hitting the highest level in terms of the national currency since 2008.

Curbing the export of crude comes in line with government measures to tackle domestic food prices, which spiked amid the global coronavirus pandemic. Last year, the Kremlin introduced an export limit of 17.5 million tons for grains such as wheat, rye, barley and corn, for the remainder of the marketing year.

The measure also included imposing an export tax on wheat of $30.40 per ton. Earlier this week, the export duty for wheat was raised to $60.59 per ton, effective from March 1.