As per reports Russian government earnings from Oil & Gas industry fell by 46% compared to a year ago. Though the comparison is not like to like as the sanctions did not exist then. But now as the large extent of sanctions is in place, the next few months will define the level of effectiveness.
The first response by Russia has been an additional cut of 0.5 million barrels per day. This action has not moved the oil prices as of now but as China and India are estimated to grow this action might create a price premium going ahead.
Many anticipated that the price cap on oil and products would keep the supply going but limit the earning. In response to this Russia has linked local crude price to Brent with a discount of $20/bbl.
As of now because of this, no negative impact has been witnessed on supply. But if in a near future any direct or indirect risk increased the Brent prices above $90/bbl then the supply would be impacted as insurance of shipping these products would become difficult. In response to this according to news reports Indian Insurance companies are trying to figure out a solution to it.
Though the disturbances from the sanctions currently are limited risk created by them on supply is not fully factored in by the current price of oil. As the Spring season begins the markets would get more clarity on the direct and indirect risks on the oil prices. This might lead to a higher price adjustment in Brent and Russian local crude as well. It might result in enhanced difficulty in supply during the second half of the year.