Russia's oil sells at premium in India, lifting Kremlin revenues
Photo: Vladimir Putin (Getty Images)
For the first time since the start of the full-scale invasion of Ukraine, Russian Urals crude is trading in India at a premium to the benchmark Brent grade, according to Bloomberg.
The price of a barrel of Urals crude on India’s west coast reached $121.65. This is the highest level since late February 2023, when relevant data began to be published.
Middle East war impact on market
The conflict in the Middle East has led to a reduction in global oil supply. Against this backdrop, the US has allowed buyers to purchase Russian oil stored in tankers at sea without the risk of facing sanctions.
According to the agency’s sources, Washington’s soft approach has reignited interest among key Indian refiners, notably Indian Oil Corp. and Reliance Industries Ltd., which have already purchased tens of millions of barrels of oil from Russia. This is helping to replenish Moscow’s revenues in the fifth year of the war against Ukraine.
Price indicators and Russian budget
Currently, the price of Urals crude significantly exceeds the average of $59 per barrel set in the Russian budget for the current year. Even oil not yet shipped from Russian ports has risen to its highest level since July 2022—averaging $89.58.
According to Bloomberg, despite rising oil revenues, the Russian government still plans to cut budget spending to reduce the deficit and avoid increasing borrowing.
Oil prices surged
Following the launch of the US-Israeli operation against Iran, global oil prices have risen sharply. This is due to Iranian forces blocking the Strait of Hormuz, through which Gulf countries supply oil to the global market.
On March 24, Bloomberg reported that Russia’s oil revenue had returned to March 2022 levels.
According to the agency, Moscow’s average daily revenue from raw material exports in March of this year doubled compared to the start of the year, from $135 million to $270 million.
