I saw an interview with an energy economist who made a lot of sense. He said the price cap at 60$ a barrel/unit was killing Russia because they are not profitable at that price if they cannot ship via pipeline. Selling to India/China requires them to transport the product by rail and its not efficient due to the long distance.
This is why OPEC nations often try to limit supply so they can keep the profit margin higher per barrel - it’s easier than just pumping more into the system so certain nations have a profitability number they try to maintain depending on what type of oil and how they get it. Same reason that US fracking needs a certain price to remain profitable.
Take this FWIW - I am no energy market guru
Cost to lift Russian oil is about $45/barrel. Now add another $12 to transport it further away to India and China. So Putin's Russia is not making much money off their oil. Europe was a great buyer because they paid full price, and they are right next door to Russia, so transport / shipping expenses were nil. Everyone was making money and was happy. German industry was very happy with cheap Russian gas.
But the psycho- Czar Vlad was a bored POS, so he started a war against Ukraine.
That’s essentially correct.
Russia has an added problem, though, because if they cut back from regions of permafrost, those wells can be long-term damaged, and the Western expertise that kept ‘em running in those harsh conditions anyway has all left. If they cut back from more, uh, benevolent areas, overall profits decline further.
February being even worse than January rather quashes the idea Jan. was just a fluke. China and India are gloating behind Pooty’s back for sure. But IF this continues, Russia has a big problem. In addition, I still think Saudi & co. might take the opportunity to knock out a major competitor for years by raising production this fall. They tried this vs. the US in the past, but the US always bounced back fairly quickly. We don’t have that permafrost problem, except for limited production in Alaska.