- The latest data from Refinitiv Eikon suggest that Russian Urals oil cargo loaded in the first half of April is mostly heading to India’s and China’s ports.
- India and China have snapped up the vast majority of Russian oil so far in April at prices above the Western price cap of $60 per barrel.
According to traders and Reuters calculations, India and China have snapped up the vast majority of Russian oil so far in April at prices above the Western price cap of $60 per barrel. That means the Kremlin is enjoying stronger revenues despite the West’s attempts to curb funds for Russia’s military operations in Ukraine.
The cap advocates say it reduces revenues for Russia while allowing oil to flow, but its opponents say it is too soft to force Russia to backtrack on its activities in Ukraine. The latest data from Refinitiv Eikon suggest that Russian Urals oil cargo loaded in the first half of April is mostly heading to India’s and China’s ports.
Shipping costs have decreased significantly recently as Russian port ice conditions eased and more tankers became available. Two traders said that freight rates for Urals cargoes loading in Baltic ports for delivery to India reduced to $7.5-$7.6 million from $8-$8.1 million two weeks ago. They added that the cost of tanker shipment from Baltic ports to China was $10 million, down from nearly $11 million a couple of weeks ago.
The traders said that lower freight costs suggest Russian oil suppliers have secured enough vessels even given long distances. Meanwhile, output cuts announced by the OPEC+ oil producers at the start of April have also boosted values for various grades worldwide, including Urals. Urals prices in Indian ports had traded at a discount of $14-$17 per barrel to dated Brent on a DES basis in March, while the price at Chinese ports was around $11 per barrel against ICE Brent.