20 Sep 2022 16:29

Russneft: Imposition of 'price cap' on Russian oil will allow company to continue exports at high dollar exchange rate

TYUMEN. Sept 20 (Interfax) - The introduction of a "ceiling" on Russian oil prices will allow Russneft to continue exporting crude at a high dollar exchange rate, the company's President Yevgeny Tolochek told reporters at the Tyumen Industrial and Energy Forum.

"As for the embargo, the European market will probably be partially restricted, and the introduction of a 'price cap' instead of the embargo indirectly confirms that the market will not cope without Russian oil," he said.

Tolochek said that the company has budgeted a Urals crude price of $65 per barrel for this year. "Next year we are looking at around $69 per barrel," he said. Therefore, if the price ceiling is set at this level, exports will be effective when the dollar exchange rate is high, the Russneft president said.

At the same time, Tolochek stressed that the company will act in accordance with the decisions taken by the Russian government on this issue. "We live in this country, so we will act as the government decides, of course," he said. "And if it is more profitable for Russia to sell oil within these parameters ['cap' prices], we will sell," Tolochek said.

"But a lot still depends on the dollar, and it would be just ideal if, in principle, we were to get rid of it in all economic formulas where it is used, it should just be eliminated as a class," Tolochek said. "Because we have no turnover in dollars as such, that is, we don't sell anything for dollars anymore, we don't buy anything for dollars, but the taxation system uses it," he said.

"We conduct most of our transactions in rubles, probably about 70%, while the rest are in yuan," the company's president said. "Foreign counterparties have opened correspondent accounts here and pay in rubles, and we have no problems with that," he clarified. "If today this is what's profitable, we will do so, and if tomorrow it will be more profitable to trade in dirhams, we will do most of our trading in dirhams," Tolochek said.