Why domestic oil prices in russia exceed export prices
Against the backdrop of sanctions, russia is offering its oil to foreign countries at massive discounts. However, the cost difference is being paid by the russian population.
For example, surgutneftegaz sells crude oil extracted in yakutia to local settlements at twice the price it charges China. Meanwhile, yakutia faces a 30 billion ruble (over $354 million) shortfall in its budget for housing and utility services.
This is how russia pays China for its support on the international stage and for assistance under sanctions targeting russia’s oil and gas sector. But the true cost is borne by russian citizens, who pay out of pocket not only for the war of aggression against Ukraine but also for the kremlin’s efforts to maintain China’s loyalty.
