I'm John Batchelor. I welcome my good colleague Michael Bernstam at the Hoover

Institution watching the sanctions regime on Russia because of its attack on Ukraine. But the complication of energy picture worldwide is now part of the story, a major part of the story. So we go immediately to Reuters report most recently for Russia in 2025. Reuters is, most recently, for Russia in 2025.

Reuters is reporting, quote, oil prices fell more than 18% in 2025, their steepest yearly

drop since 2020 in the pandemic amid growing oversupply and concerns.

Michael, the lowest number we've been able to identify heretofore was that Russian

oil would fall into the 40s because of the discounts they must give. Is it going lower? Good

evening to you, Michael. Good evening to you, and it is going lower because of the combination

of oil blood in the world and Western sanctions that allow,

without reducing the supply of Russian oil, they allow India, China and Turkey to extract higher discounts.

So Russian oil sells in about the same quantity, but much cheaper.

And so the latest reports from the market agencies, like at Plur and Restada Energy,

they told that Russian euros, which is the major, most important Russian brand of oil,

sells between $34 and $35 per barrel.

And even the Russian very high quality oil, Eastpore, East Siberian Pacific Ocean,

which sells from the far east to China, and used to sell above brand because it is a high-quality

oil, now sells at $47 per barrel, which is well below brand.

So even China is in this situation is extracting very high discounts.

And so even the Russian budget reflects it. So now the Russian tax rate met minimum

extraction tax MET is now charging $39 per barrel as the benchmark price for Russian oil taxation.

And based on that price, $39 per barrel,

Russia imposes taxes on oil companies.

And of course, for some of these companies, it is even less because they sell even lower.

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