Russian Oil Tax Changes To Hit Its Crude Output: US Dep Treasury Sec

The Russian government’s changes to the way it taxes oil sales were forced by Western sanctions on Russia over its war on Ukraine and will hit its oil production capacity over time, US Deputy Treasury Secretary Wally Adeyemo said.

• Russian President Vladimir Putin in February signed a law fixing the discount on Russia's Urals blend of crude oil for tax calculations.
• The tax law changes the calculation of taxes on Russian oil sales by assuming a fixed discount to international benchmark Brent crude, instead of basing it on the market price of Urals.
• It set the maximum discount for Russia's Urals blend compared with Brent crude for tax calculations at $34/bbl in April, falling to $31/bbl, $28/bbl and $25/bbl in July.
• The tax changes "will constrain Russia’s oil companies going forward, leaving them with fewer funds to invest in exploration and production and over time diminishing the productive capacity of Russia's oil sector, " Adeyemo said.