In a remarkable turn of events, the price of Russian Urals crude oil has surged above the predetermined price ceiling set by the G7 nations, in an effort to curb the Kremlin’s revenue, as reported by Bloomberg. According to Argus Media, a leading agency in the energy sector, the price of Urals crude now stands at $60.78 per barrel.
It is worth recalling that back in February, the European Union finalized a decision to cap the price of Russian oil transported by sea at $60 per barrel. Subsequently, G7 countries and Australia also joined these restrictions.
However, Russian Urals crude has exceeded the upper limit, marking a symbolic victory for Moscow, which maintains a significant clandestine fleet of vessels for transportation purposes.
For certain buyers of Russian oil, this price increase may pose a problem as they are already reliant on the West and risk falling under sanctions.
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“Indian banks have been particularly cautious in recent months, fearing sanctions, and have demanded oil refiners to demonstrate that the price of their cargo was below $60 in order to proceed with payment,” noted Vandana Hari, founder of Vanda Insights.
Hari further emphasized that this situation could have an adverse effect on Moscow as well.
“It is possible that Russia will have to offer discounts to attract buyers in Asia,” she added.
However, Russia will have to utilize its tanker fleet and rely on the services of so-called friendly nations, assuming, of course, that these partners are willing to take the risk.
Moreover, the issue of insuring Russian cargo remains unclear, as Western countries have refused to provide insurance services. In such a scenario, there would be no one to cover the expenses that would typically be handled by insurance companies.
