Russian Urals oil climbs above $66 a barrel, Reuters calculations show

Russia’s Urals oil prices have climbed above $66 a barrel in western ports amid stable freight rates and narrowing discounts for March cargoes, and have exceeded a Western price cap for around a month, four traders said and Reuters calculations showed.

The Urals crude price has been rising since mid-January, according to Reuters monitoring, boosting Moscow’s energy profits despite sanctions imposed by the United States on shipping and trading companies for not complying with the $60 per barrel Western price cap.

The cap was imposed in 2022 by the U.S. and other Group of Seven (G7) countries and Australia in attempt to reduce Russia’s revenue from seaborne oil exports as part of sanctions for its military actions in Ukraine.

Under the terms of the cap, suppliers of Russian oil are only able to use Western services such as shipping and insurance when the crude trades below $60 per barrel.

The United States has imposed sanctions on trading and shipping firms for evading the price cap in recent months, forcing them to cut or withdraw services and making the sale of Russian oil more complicated.

Urals cargoes loading from Russia’s ports of Primorsk, Ust-Luga and Novorossiisk were priced at $66-67 per barrel on Thursday on a free-on-board (FOB) basis, which excludes freight and insurance costs, according to Reuters calculations.

Shipping costs to India from the main Baltic ports were around $8 million, while Urals oil differentials on a delivered-ex-ship (DES) basis in Indian ports firmed to minus $3.5-$4 per barrel from recent estimates of minus $5 per barrel, according to four traders.

Brent crude eased fell 17 cents, or 0.2%, to $81.43 a barrel by 1324 GMT on Thursday. O/R

Traders said that Brent prices would need to soften considerably further to push the Urals price, which tracks the benchmark, back below $60 a barrel.
Source: Reuters (Reporting by Reuters; Editing by Kirsten Donovan)