Russian Oil Sold To India Below Price Cap In Buyers' Market


Russia's flagship Urals crude has been sold at deeper discounts this month following a European ban on Russian oil imports, and dominant buyer India has bought barrels at well below a $60 price cap agreed by the West, four market sources said.
The European Union ban on imports of Russia's seaborne oil from Dec. 5 has driven Moscow to seek alternative markets, mainly in Asia, for about 1 million barrels per day.
Also on Dec. 5, the Group of Seven leading economies implemented a $60 price cap on Russian seaborne oil to try to limit Moscow's ability to finance its war in Ukraine.
Russia has said it will not abide by the cap even if it has to cut production.
The Western actions have left Russian producers in fierce competition with each other and with suppliers from Asia, Europe and the Middle East, meaning their best hope of finding buyers is to lower prices, two traders said.
Since Russia began its invasion of Ukraine in February, India has become the main outlet for seaborne cargoes of Urals crude.
For some deals this month, the price for Urals in Indian ports, including insurance and delivery by ship, has fallen to around minus $12-$15 per barrel versus a monthly average of dated Brent, down from a discount of $5-$8 per barrel in October and $10-$11 in November, the sources said.
The discounts mean oil is in some cases being sold at below overall production cost including local levies, industry sources said.
FREIGHT ADDS TO THE PRESSURE
The pressure on producers has increased further at Russia's western ports because a shortage of vessels suited to Russian winter weather has driven up freight costs, which can be borne by the seller depending on the terms of deals agreed.
Freight rates have risen to between $11 and $19 a barrel compared with less than $3 per barrel before February and are roughly twice as much as in the middle of the year.
Reuters calculations showed discounts for Urals oil at Russia's western ports for sale to India under some deals have widened to $32-$35 per barrel when freight is not included in the price.
The value of the Dated Brent benchmark hovered below $80 a barrel early in December, while the estimated cost of Russian oil for producers including extraction, tax and transport costs to export ports stood around $15-45 per barrel, deputy energy minister Pavel Sorokin said last year.
Russian oil suppliers are trying to handle Urals oil transport to India themselves using their own vessels and shipping partners, which can reduce transport costs, traders said.
But many oil producers still rely on trading firms, which means they have to share any profits they have.
India, the second largest consumer of oil in Asia, is better located to buy Urals than China because of a shorter transport route, and its refineries are well-suited to processing Russian oil.
In addition, New Delhi recognise ships and insurance cover provided by the Russian entities, which are no longer recognised in Europe.
Urals supplies to India in November rose to at least 3.7 million tonnes and reached a record 53.2% of overall grade's loadings via sea ports last month, Refinitiv Eikon data showed.
Russia emerged as biggest oil supplier to India in November replacing Iraq, data obtained from trade sources showed.
"The market is full of Urals. There is plenty. Many traders are offering Urals cargoes for both December and January delivery," a source with an Indian refiner said. None of the sources could be named because they were not authorised to speak to the press.
(Nidhi Verma and Reuters reporters; editing by Barbara Lewis)
Related News
Latest Cars
- Maruti Suzuki
VictorisEx-showroom Price₹‚¹ 11.93 - 23.19 Lakh - VinFast
VF7Ex-showroom Price₹‚¹ 24.23 - 29.57 Lakh - VinFast
VF6Ex-showroom Price₹‚¹ 19.13 - 21.22 Lakh - Citroen
Basalt XEx-showroom Price₹‚¹ 8.72 - 13.21 Lakh - Mercedes-AMG
CLE 53Ex-showroom Price₹‚¹ 1.45 Crore - Renault
TriberEx-showroom Price₹‚¹ 5.76 - 8.6 Lakh - MG
M9 EVEx-showroom Price₹‚¹ 81.08 Lakh - BMW
2 Series Gran CoupeEx-showroom Price₹‚¹ 48.72 - 50.76 Lakh - Tesla
Model YEx-showroom Price₹‚¹ 69.47 - 78.75 Lakh - Kia
Carens Clavis EVEx-showroom Price₹‚¹ 20.87 - 28.41 Lakh
Upcoming Cars
Trending News
Latest News
- Jafar Rizvi | Sep 25, 2025GST 2.0: Honda CB750 Hornet, XL750 Transalp, X-ADV 750 Prices Hiked By Up To Rs 88,000The X-ADV 750 gets the maximum hike, followed by the XL750 Transalp and the CB750 Hornet.1 mins
- Jaiveer Mehra | Sep 25, 2025Maruti Suzuki Invicto Secures Five-Star Bharat NCAP Crash Safety RatingMaruti’s most expensive model on sale in India received a full five-star rating for adult and child occupant protection, mirroring its sister model, the Toyota Innova Hycross.2 mins
- Jafar Rizvi | Sep 25, 2025GST 2.0: Honda CB650R, CBR650 Prices Increased By Up To Rs 76,000The CB650R and the CBR650R are now priced at Rs 10.30 lakh and Rs 11.16 lakh (ex-showroom).2 mins
- Jafar Rizvi | Sep 25, 2025GST 2.0: Honda Rebel 500, NX500 Prices Hiked By Up To Rs 43,000The NX500 ADV is now priced at Rs 6.33 lakh while the Rebel 500 costs Rs 5.49 lakh (both, ex-showroom).2 mins
- Jafar Rizvi | Sep 25, 2025VLF Mobster 135 Launched In India At Rs 1.30 LakhThe Mobster 135 is VLF's first ICE scooter to launch in India, following the introduction of the Tennis electric scooter.2 mins
- Amaan Ahmed | Sep 25, 2025New Skoda Octavia RS India Launch On October 17; 100 Units To Be Imported In 2025The launch of the fiery RS – being shipped in as a fully built-up car – will also mark the return of the famed Octavia nameplate to the Indian market after a near two-and-a-half-year hiatus.1 mins