Russian Urals oil prices drop to $16 per barrel
7.02.2025 - 09:32
Due to US sanctions, the price of Russian Urals oil has fallen below $60, and sellers are forced to provide significant discounts.
Russian sellers of Urals oil are forced to provide buyers with discounts of up to $16 per barrel. Such a gap between the nominal value and the real selling price has not been seen since May 2023, Bloomberg writes.
Key export prices for oil in Russian ports differ significantly from the cost of imports in Asia. As noted, this is one of the signals that new US sanctions, introduced on January 10, are dealing a serious blow to the Russian oil market.
Restrictions imposed by the US Office of Foreign Assets Control provide for the blocking of 161 tankers involved in the transportation of Russian oil. Because of this, buyers in China and India have become more cautious about such vessels, and the freight cost of tankers that are still ready to transport Urals has increased.
After the sanctions were announced, the discount on Urals in the Baltic port of Primorsk relative to the European benchmark North Sea Dated increased to $15.70 per barrel. A similar situation is observed in comparison with the prices for delivery to India – there the discount reached $13, which is the largest figure since May last year.
Recall that in January 2025, the Russian Federation received record low oil revenues due to falling prices and rising costs for supporting oil refiners. The Russian budget’s revenues from raw materials have approached an annual minimum.
Prices below $60 per barrel formally allow Russian exporters to use Western insurance and tanker services. However, when the cost significantly exceeds this level (at the end of 2023 it exceeded $80), some shipowners and Western service providers avoid cooperation with Russian traders.
As USM reported, the day before, Ukrainian President Volodymyr Zelenskyy imposed sanctions against Russia’s so-called shadow fleet.
