Prices for Russian Urals oil cargoes loading in April in Indian and Chinese ports have improved against comparable Brent benchmark, but have remained below the West’s $60 price cap due to lower Brent prices, three market sources told Reuters.

In the middle of March, global oil prices fell to their lowest since the end of 2021 amid market concerns over the banking crisis. Since then Brent has risen to $78 from $73 per barrel, but remains below $86 per barrel traded early this month.

Brent crude futures gained 61 cents, 0.8%, to $78.73 a barrel by 1006 GMT. West Texas Intermediate U.S. crude was up 53 cents, or 0.7%, to $73.34 a barrel.

April Urals oil cargoes were estimated at discount of $14-17 per barrel to dated Brent in Indian ports on a DES (delivered ex-ship) basis compared to a discount of $18-20 for March volumes, the sources said.

Lower Brent price allows Russian Urals oil to firm without breaching the “price cap” of $60 per barrel on FOB (free on board) basis in Russian ports introduced by Western countries.

The cost of April Urals shipments on FOB port Primorsk basis is currently about $50 per barrel, Reuters calculations showed.

Transport costs for Urals oil from the Baltic ports to the ports of India is about $7.5-8.5 million per route and just over $10 million to China, Reuters sources said.

“Freight rates are different depending on the supplier and shipper, but no sharp changes there so far like a couple of months ago,” said a trader in the Russian oil market.

In March, India’s purchases of Urals oil accounted for more than 65% of total seaborne exports of Urals, Refinitiv data showed.
Source: Reuters (Editing by Tomasz Janowski)