In April, India and China bought most of the Russian oil at prices above $60 a barrel in the West. This means that the Kremlin enjoys stronger revenues, despite Western sanctions to limit funds for Russian military operations in Ukraine.
Western price caps should remain stable for now, despite pressure from some EU countries, such as Poland, to lower the benchmark to increase pressure on Moscow.
Supporters of the capital claim that it decreases Russia’s income by permitting oil to be exported; however, its dissenters say it is too feeble to compel Russia to cease its military operations in Ukraine.
Cargoes of Russian Urals oil loaded in the first half of April are going to ports in India and China. India has over 70% of marine stocks this month, while China has about 20%.
Earlier in April, the daily price of the Urals dropped below the limit due to lower freight rates and reductions in discounts when compared to global benchmarks.
Shipping costs fall for Russian oil deliveries to India and China
India and China have not agreed on a price cap, but the West thought the threat of sanctions could deter traders from helping those countries buy oil.
The Urals average discounts to dated Brent on a DES basis in Indian ports reportedly amounted to $13 per barrel, while the discounts to ICE Brent in Chinese ports stood at $9 per barrel. Additionally, the traders mentioned that the shipping costs for loading from Baltic ports to India and China were $10.5 and $14 per barrel, respectively.
Shipping costs have fallen significantly recently as ice conditions in Russian ports have eased and more tankers have become available.
For the Urals, cargoes loaded at Baltic ports for delivery to India eased to $7.5-7.6 million from $8-8.1 million two weeks ago.
The cost of shipping tankers from Baltic ports to China was $10 million.
In winter, freight costs for Ural cargo exceeded $12 million for India and China.
The low cost of cargo indicates that Russian oil suppliers provide enough ships even for long distances.
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