Russia-India Oil Shipping Rates Drop as Urals Dips Below Price Cap | OilPrice.com
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Breaking News:
The cost of shipping Russian crude from its ports in the Baltic Sea to India has dropped this month as the price of Russia’s flagship crude grade, Urals, slid in early April to below the G7 price cap, which increases the availability of tankers.
The price cap mechanism set by the G7 and the EU says that Russian crude shipments to third countries can use Western insurance and financing if cargoes are sold at or below the $60-a-barrel ceiling.
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The price of Urals dipped below $60 per barrel earlier this month as international benchmarks crashed in the market rout triggered by the U.S. tariffs and concerns about the global economy.
As a result, cap price-compliant shipments can be made from Russia’s Baltic ports to India via tankers, traders, and insurers owned by Western companies.
The price of Urals at Primorsk was $53.50 per barrel on Thursday.
In April, the shipping rates for sending Urals from the Russian ports of Primorsk and Ust-Luga to India slipped to about $6 million per one-way shipment on average, down from $7 million at the end of March, according to data cited by Reuters.
Shipping rates for Russian crude hit a year-high in February and March year after the January U.S. sanctions designated dozens of tankers carrying Russia’s crude to Asia and traders scrambled to gain access to non-sanctioned vessels.
The lower price that Russian crude fetches this month could hit Russia’s economy.
The oil market meltdown could pose risks to the Russian economy, Russia’s Central Bank Governor Elvira Nabiullina said last week.
The escalation of the tariff wars could negatively affect Russia’s economy, TASS news agency quoted the governor as telling Russian lawmakers in parliament.
“The main channel of influence may lie through fluctuations of oil prices, a decline of oil prices,” Nabiullina was quoted as saying.
By Charles Kennedy for Oilprice.com
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