Russia is offering to discount its oil by as much as 30% for Asian buyers as the G7 pushes its price cap
- Russia has approached Asian buyers to pitch long-term, discounted crude contracts, Bloomberg reports.
- Russia has offered to sell oil to Indonesia that is 30% lower than international market prices.
Russia is in talks with several Asian nations for potential long-term oil contracts with steep discounts, a Western official told Bloomberg Wednesday.
According to the report, the discounts could be as much as 30%, and may signify that Moscow is looking to counter ongoing discussions by the US and Group of Seven nations regarding a price cap on Russian crude.
Additionally, Russia's talks with Asian buyers may also reflect a push to secure more buyers as Europe shuns its supplies.
Russia offered to sell oil to Indonesia that is "30% lower than international market price," Indonesia's minister of tourism, Sandiaga Uno, said in comments on Instagram. He noted, however, that concerns remain over looming potential sanctions from the US.
The European Union's ban on seaborne Russian oil imports is set to begin December 5. But concerns that it could send prices soaring and drive profits up for Russia have led to calls for an exception to the ban that would keep oil flowing but cap the price.
So far, few Asian countries have explicitly voiced support for it, and sources told Bloomberg that India remains hesitant to join the price-cap scheme as it may cause Russia to sell cheap crude to other buyers instead.
Meanwhile, Rystad Energy predicted that Russia's crude output will soon fall by over a million barrels a day, stemming from lower demand in Asia and the impending EU ban.
"Russia has so far demonstrated high resilience to the unprecedented pressure imposed by Europe and the US – but the worst is yet to come," the research firm said Tuesday. "Domestic consumption has helped fill the gap during the peak demand season, but overseas demand for Russian blends has dipped, spelling trouble further ahead."
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