That represents Western shippers and insurers in countries that have sanctions on Russia over the Ukraine dispute would still be capable of providing services to protect shipments of Russian crude without the worry of being sanctioned.
The decline from the average Urals cost of $71.10 in the prior month was not due to the country observing the price cap, which Moscow has told is illegal and intimidated to cut oil output in reply, but because of a general downward trend in global oil prices over the period.
The Urals price was sharply inferior to $80 per barrel for the international Brent benchmark.
As stated by U.S. Treasury guidance, the cap is on free-on-board (FOB) prices, which do not contain the expense of insurance and shipping. That would be the crude price if a buyer loaded it directly from a Russian terminal.
Buying Under the Price Cap
Argus pricing agency estimates The RFMU price, the basis for taxation. It believes the blend prices in the Baltic and Black Sea, including the expense of insurance and freight (CIF), are more than the FOB level.
As stated by Reuters data, the Urals price for delivery from the Black Sea port of Novorossiisk on a FOB basis is $48.69 per barrel.
It is $57.28 on a CIF basis.
Market sources expressed Urals crude was at more in-depth discounts this month following a European ban on Russian oil imports, and prevailing buyer India bought barrels well below the West’s $60 price cap.
Since Russia sent its battalions into Ukraine in February, India has become the primary outlet for seaborne cargoes of Urals crude.