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Russia Faces Trillions in Losses Due to Undervalued Oil Pricing, Says St. Petersburg Exchange
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Russia may have lost “trillions of dollars” due to the undervaluation of its oil and petroleum products by international agencies, according to Igor Artemyev, head of the St. Petersburg International Commodity Exchange (SPbMTSB), The Moscow Times reported on January 1.
In an interview with Russia 24, Artemyev stated that this undervaluation has been an ongoing trend since Soviet times, with international agencies manipulating pricing without clear transparency.
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Artemyev emphasized that global pricing mechanisms for Russian oil are not fully understood, leading to significant financial losses for Russia.
In response, the St. Petersburg Exchange is pushing for the creation of Russian pricing indicators. Artemyev also announced the formation of a National Exchange Price Agency, which will use liquid market data, including futures markets, industry associations, and government departments as sources of information, according to Moscow Times.
He believes this initiative will increase tax revenues by ensuring more accurate, “fair” taxation based on domestic pricing.
Meanwhile, some Russian oil companies have become unprofitable due to heavy discounts offered to buyers in India and China. Between December 22 and 28, the price of Russia’s Urals crude dropped to $33–34 per barrel, the lowest since the pandemic, with the discount to Brent reaching $27 per barrel, The Moscow Times wrote.
Analysts have noted that several oil projects are now unprofitable, particularly due to extraction challenges, although older fields in Volga and Western Siberia continue to operate profitably due to favorable tax rates on production.
Previously, it was reported that Russia’s reliance on oil and gas revenues will continue to shrink over the medium and long term as low-cost hydrocarbon reserves are depleted, Russia’s Finance Minister Anton Siluanov said.
