Russian oil prices soar though tanker costs eat into gains

The price of Russian Urals oil, shunned by many buyers ‌amid Ukraine-related sanctions, has surged on the war in Iran, though costs are also rising, traders said on Tuesday.

With tankers from top exporter Saudi Arabia effectively blocked by Iranian ​threats to Gulf shipping, attention has returned to Russia, the world’s ​second-largest seller.

Urals crude from Russian ports was being offered at around $76 ⁠per barrel on Monday on a free on board (FOB) basis, Reuters data ​showed, up from $45 just two weeks ago.

The price of a Urals cargo loading ​from the Baltic Sea port of Primorsk has jumped to around $54 million this week from about $35 million in February, according to Reuters calculations.

Russian sellers faced near negative margins on exports earlier this ​year, traders said.

Despite G7 and other efforts to cap Russian seaborne oil ​prices, Urals for delivery to Indian ports is now selling at a premium to benchmark Brent ‌crude ⁠for the first time ever.

The United States last week granted Indian refiners a temporary waiver to resume imports of Russian crude already aboard tankers.
Yet traders said Russian sellers also face sharply higher costs. They said several vessels were fixed ​at around $22-23 million from ​Russia’s Baltic ⁠Sea ports to India amid a scarcity of the vessels.

That’s nearly double rates seen in early February and up about $5-8 ​million from late last week.

From Russia’s Black Sea port ​of Novorossiysk, ⁠which resumed loadings on Friday after recent drone damage, freight costs also rose above $20 million to India, traders said.

Brent oil surged to more than $119 a barrel on ⁠Monday ​to its highest since mid-2022 amid supply cuts by ​Saudi Arabia and other Gulf producers.
Prices pared gains after U.S. President Donald Trump predicted the war in the ​Middle East could end soon.

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